Nestle: Maine tough state for business

POLAND — In the past several years there have been more than a dozen legislative proposals to limit development or tax Poland Spring's bottled water, said an executive who oversees the water beverage business in North America for Nestle, which owns Poland Spring.

Poland Spring
Amber Waterman/Sun Journal

Kim Jeffery, president and CEO of Nestle Waters North America, second from left, speaks with Diane Jackson, a representative from Sen. Olympia Snowe's office, right, John Delahanty of Pierce Atwood and Alison Hagerstrom of the Greater Franklin Development Corp. before speaking at the Poland Spring Good Neighbor Grant Luncheon Thursday in Poland. Jeffery, who lives in Connecticut, also toured the water bottling plant.

When Nestle bought Poland Spring in 1980 it was bankrupt with 28 employees. “This place was falling down,” said Kim Jeffery, president and CEO of Nestle Waters North America. “It was hard for me to imagine when we bought this (that) I would be standing here today leading a $4 billion company with 7,500 employees.”

In addition to being the largest bottled water company in America, Nestle Waters North America is now the third largest non-alcoholic beverage company by volume in the country. Poland Spring is only one of its bottled water companies, but it makes up one-fourth of those sales.

After investing millions, Poland Spring does more today to promote Maine than even L.L. Bean, Jeffery said.

“It's an iconic brand," he said. "I'm in New York City all the time. You cannot walk 100 yards in Manhattan without falling over a bottle of Poland Spring on some cart on every single street.” That means billions of interactions with that bottle every day. "Everybody knows it comes from Maine.”

Despite a tough year in 2009 when sales declined, water sales will continue to grow, he predicted.

But Maine isn't an easy state in which to do business, he said.

“We've had 16 pieces of legislation from legislators to tax us or limit our development as a company,” Jeffery said. That has meant spending a lot of money to keep those proposals from being approved.

Poland Spring offers a healthy product and operates in a sustainable way, Jeffery said. “We don't take more than Mother Nature gives us.” Not being sustainable would not be logical, Jeffery said, because it would put them out of business. The Maine Department of Environmental Protection monitors how much water can be taken to protect underground water and the life that depends on it, said Andy Fisk who heads DEP's water bureau.

Poland Spring employs 800 people in the state, offering some of the best-paying jobs in Maine, Jeffery said. With so many legislative bills aimed at the company, “something's upside down here,” Jeffery said during a speech Thursday honoring “Natural Leader” award-winner Ferry Beach Ecology School of Saco.

“We love being in business here, but sometimes it's hard," he said. Sixteen pieces of legislation is an awful lot to deal with.”

He asked the audience of nonprofit organization officials, to which Poland Spring donates nearly $1 million a year, to put in a good word to legislators. The audience laughed.

Rep. Jon Hinck, D-Portland, was not amused when reached by phone Thursday.

One of those 16 bills was his. He proposed that Poland Spring be taxed 1 cent per gallon, which works out to about one-eighth of a cent for an individual bottle of water, he said. Half of that tax revenue would be used for general state purposes, 25 percent to protect Maine water quality and 25 percent would go to the community where the water is extracted.

That bill, like the others, did not pass.

Hinck said he did not object to the business, calling Poland Spring a “reasonable employer.” He didn't object to how Nestle runs the business. He's comfortable that the industry is not taking too much water from Maine.

“Where I differ with Nestle is their hyperbole over the harm that would be caused by such a small tax,” Hinck said. Maine taxpayers invest a lot to protect natural resources, including water.

Poland Spring water “is viewed as a good brand because Maine takes efforts at environmental protection," Hinck said. "The work we do to protect Maine generally benefits products, particularly this one, that market purity. There's nothing wrong with the state of Maine receiving a small return on the sale of products like pure water, particularly when some of the money could go to protect the resource.”

He doubted one-eighth of a cent per bottle would harm Poland Spring sales. “People buy Poland Spring because they buy into the idea it comes from a pure source,” he said.

During the State House debates, “no matter how many times Poland Spring hammered on the horror of such a tax, they never could explain how that small addition would affect anything.”

Hinck said he may re-introduce his bill.

bwashuk@sunjournal.com

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Displaying comments, from newest to oldest

Grady's picture

IF NESTLE DOESN'T LIKE "DOING BUSINESS" IN MAINE -

If Nestle doesn't like "doing business" in Maine - they can leave! They make billions (and that's not an exaggeration) off our water. And they whine because there is a remote possibility of a one cent per gallon tax? Their bottling plants are heavily tax-subsidized by TIF grants. Their "800 jobs," which can not be confirmed, include a large number of contract and part-time seasonal workers. (The so-called 800 jobs probably also include the army of lawyers and public relations specialists they employ!) They pay no compensation to the unfortunate towns that have the privilege of Nestle large-scale water extraction. Those towns have to use their own taxpayer money to repair the roads that those green 18-wheelers destroy. And they pay no per-gallon tax on the water that is turned into a product and sold for billions. The State of Maine and Maine communities do not benefit from Nestle's "doing business" here. What could the State of Maine possibly do to "make Maine more business-friendly to Nestle?"

Irish Rogue's picture

Nestle isn't the only company having issues

with doing business in Maine, and yes,they are large (my husband delivers for them all over the US-not affiliated with PS or Nestle,though.)
It has gotten so (regarding the excessive regulations and taxes) that larger corporations cannot turn a profit here in this state and are looking to get out.Look at all the shoe shops and fabric industries,for one. They are mainly outsourced overseas but even logistics companies based here in Maine are trying to relocate.
If it is hard for the average citizen to live here in this state (and I can affirm that it is for us) then companies are sure to be feeling the pinch as well.

Grady's picture

CORRECTION TO HEADLINE - NESTLE TOUGH FOR MAINE

NWNA CEO has the nerve to whine about Maine not being business-friendly to Nestle? Come on! They pay no per-gallon tax on the water they mine from our aquifers and then they turn around and sell it for billions. They already mine 700 million gallons of Maine water each year and they want more, for free. Nestle does not compensate the towns where they mine water. Citizens of those towns have to pony up property tax to fix the roads that their trucks destroy. Nestle sued Fryeburg into submission (all the way to the Supreme Court) so Nestle could have a 24/7 loading facility in a residential zone. Because Maine has the archaic Absolute Dominion rule (allowing whoever has the biggest pump to take all the water under their property - even if it collapses the neighbor's well) and because mining water in Maine is a permitted use, this state has pretty much allowed Nestle to do whatever it wants. And Nestle is complaining about the POSSIBILITY of a 1 cent per gallon tax. Those "800 jobs" are not even all full-time jobs. A good percentage are seasonal, contract jobs. They won't allow their actual employment numbers to be made public. Citizens of Maine - wake up!

thinkingman's picture

Interesting arguments..."they

Interesting arguments..."they don't pay tax on the water"...nope and no one pays tax when they cut down a tree and sell it or pick blueberries from the side of the road, but by gosh those are Maine resources too. "They only employ 800 people" yes 800 people with good jobs and benefits, good working conditions and most important actually pay income taxes in tis state, spend their money in this state and keep our economy moving (slowly but moving)...We cannot tax our way out of deficits and we cannot tax our way into prosperity..it just doesn't work. I wonder what would happen if there was no business of any kind left in maine outside of walmart and social services - careful what you wish for!

Irish Rogue's picture

Unfortunately...

that's what it's going to come down to; I agree with you.If it weren't for BIW ,PS and some other larger industries (P&G,maybe?) Androscoggin county would be hurting worse than it already is.
I am in no means pro corporation-I'm a realist.

abolishthemta's picture

Correction to headline – Nestle tough for Maine roads/drivers

Correction to headline – Nestle tough for Maine roads/drivers

Nestle a good neighbor ?!?!?? Nestle costs Maine taxpayers hundreds of millions of dollars annually, as we pay to fix the damage to our roads they cause in their quest to make billions off of our natural resources. Anybody who is unfortunate enough to have to commute to Portland for work cringes at the sight of the green tanker trucks plying every road in the region. Our small country road, Rt 124, was re-paved just a couple of years ago and has now been completely destroyed by the Nestle trucks that take this road as a short-cut in order to save money on diesel; they run at night so as to hide in the cover of darkness. This road, and many others, are not engineered to accommodate large truck traffic, but the MDOT does nothing to restrict truck traffic – it’s business as usual and we foot the bill. The cost of all the work on Rt 26 should be paid for entirely by Nestle. I am so sick and tired of being stuck behind their trucks every day, everywhere I drive; it’s impossible to drive anywhere and not be impacted by their trucks. The citizens of Maine are subsidizing the profits of corporations and they, in turn, impact our state in such an adverse way.

mrnpchick's picture
verified

trucks

Funny everyone complains about Poland Spring trucks. Their drivers are watched and monitored for everything. Hit a deer? Sorry, you're fired for not paying attention. Speeding? Find a new job. Quite frankly, I never worry when I see the green trucks. They have excellent drivers. Logging trucks on the other hand? Terrifying! Routinely overloaded, on the roads after hours so they won't get weighed or inspected, swaying all over the roads, top heavy, on can go on and on. And then then Baldacci passes a law so they can overload 25% because fuel prices went up! How's the impact on the local, poorly built and maintained roads now?! The states woes are not Poland Springs fault, time to look elsewhere. Oh and I wish they'd build a bottling plant in my town!

momof4's picture

Actually, it was a great luncheon

and they are fantastic corporate neighbors for Poland. Perhaps you antibusiness folks ought to take a tour of the facility. But you'd rather tax 800 Maine people out of good paying jobs. I've had many dealings with the executives of the company over the past 6 years and found them to be nothing but helpful, enthusiastic and generous to the community, as well as very good stewards of the environment. And it always starts with a small tax. Once the foot is in the door the tax will go up, up, up.

Sometimes when I read these posts I am glad most of you don't step up to the plate and volunteer for your community. We're being screwed bad enough as it is....

ojhuig's picture

"Not being sustainable would

"Not being sustainable would not be logical, Jeffery said, because it would put them out of business." I absolutely believe that if it were possible, corporations like Nestle would drain the ground of all water and then leave. Putting one division out of business is not a bad deal for them.

CharlieBrown's picture

Maybe someday Maine will wise up

Around the World only the UK has higher business taxes than the US. Wonder why all the jobs are going to countries that used to be called 3rd world? Maine has one of the higher state tax rates on businesses in the US. Wonder why jobs are not growing in Maine? Giving businesses an incentive to open in your state brings jobs. The 'lost' revenue from the tax break is made up by the creation of jobs. The income tax on the workers, the sales tax on the things they can now buy, and the reduction in state aid to them because they are now employed more than make up for the tax breaks. Looking at the tax break as lost revenue is extremely short sighted by the state. If a business does not come to do business or a current business does not expand and grow, you didn't lose revenue. You just didn't do anything to earn any.

Matt's picture

Anyone who can find fault with Nestle

or bitch about what they do for the people of Maine is lost!
They bottle and distribute a RENEWABLE RESOURCE...... providing boatloads of tax money and 800 Mainers with jobs- good jobs!
Isn't this the ideal employer for liberals? Renewable resources and craploads of taxes!

ojhuig's picture

What's your definition of

What's your definition of renewable? I come from a family of well drillers. You can deplete an aquifer. It happens all the time.

Grady's picture

POLAND SPRING IS NOT A MAINE COMPANY!

Poland Spring is a brand name for Nestle Waters North America - a behemoth Swiss multi-national -- the largest food and beverage corporation in the world. It has nothing to do with Maine, other than the fact that they mine over 700 million gallons of our water per year (for which they pay no per-gallon tax). They re-sell our water at a profit that makes water more valuable than oil. They put thousands of trucks on the road 24/7 and they endanger our aquifers. They don't even employ 800 FULL-TIME workers - a percentage of that number is part-time or contract workers - but they won't release the numbers. This is our water. We need to stand behind our legislators and pass real legislation that protects our groundwater and ends Nestle's expansion into additional water mining.

lewiston taxpayer's picture
verified

Hopefully Maine voters are smart in 2010

and votes Hinck and other tax happy legislators out

cranky yankee's picture

First it's a "...$4 billion

First it's a "...$4 billion company with 7,500 employees." And then the real stat: "Poland Spring employs 800 people in the state"Poland Spring employs 800 people in the state." So Jeffery wants to throw out the big numbers to make us think PS is REALLY doing Maine a favor. Okay, 800 jobs is nothing to sneeze at, but at what cost? And what about the 6700 other jobs? Keep in mind, too, that Nestle is a SWISS company, (hey, I like the Swiss, and have friends who are Swiss) so exactly where is that $4 Billion going (the salaries of the 800 people in Maine sure as H-E-double hockey sticks doesn't add up to that)?
Nestle seems to want Maine water for free. Their trucks run hundreds of thousands of miles over Maine roads, 24/7/365 doing considerable wear and tear to those roads. Yet, they complain about vehicle registration fees and fuel taxes which are used to maintain those roads. I don't know when the people of Maine are going to wake up regarding taxation. Yes, taxes are high. Yes, we ALL wish they were lower. The reality is that we have so few people, and far too many big business that are getting tax incentives and rebates (that we, the individiual taxpayers have to make up for). The only way to make those numbers better is to either tax the businesses, or provide less infrastructure (police, fire, schools, roads, etc.). It's that SIMPLE. If you want all of these things, they are going to cost MORE, which means higher taxes.

concerned KD's picture

use your head

If Nestle distributes/bottles and warehouses water throughout the country for distribution in all states and overseas, do the math.. Out of the 6700 employees that are not in maine, ask yourself or Nestle how many states those jobs are spread out in. If we average the other 49 states then it only comes out to 136 jobs per state.. This does not even account for anything that may go on overseas with storage and distribution.. It would appear to me that Maine would be on the top of the list for employees per state. If they didnt have any employees in other states they would have no distribution and could not be that $4 billion dollar a year industry that they are.. Where would that leave the 800 Maine employees if they were only producing to fulfill the sales of water in Maine alone...

dh jup's picture
verified

Tron, The reason an

Tron, The reason an overwhelming majority of P.S sold comes from elsewhere is the Population in Me. is so small compared to the states that it is sold in.Should NWNA stop selling out of state? That would be great for revenue for Me.

dh jup's picture
verified

I believe NWNA is already

I believe NWNA is already paying more than their fair share of TAXES to the republic of Maine,not to mention what their 800 employees are paying.When is enough enough?Maine isn't just tough to do business in. It's a tough place to find a job.Even tougher to find a good paying job. Keep electing liberals (Collins & Snowe) and nothing will change.

joe public's picture

[While I agree 1/8th of a

[While I agree 1/8th of a cent isnt much I dont thinkits right to charge it the company gives great jobs and has been a very good promoter of Maine why not target companies that dont do anything for Maine ??

tron's picture

The overwhelming majority

of people who drink Poland Spring water are NOT in Maine.

tron's picture

If Alaska can balance its budget

by taxing Americans for its oil, we should tax for the use of our water. No difference!

mbthedragon's picture

A Tax is a tax is a tax...

A Tax is a tax is a tax... etc.. To make you happy Tron, after you pass on, I will pour a bottle of Poland Spring Water over your grave. After it has been through my kidneys!

kj's picture
verified

If this were the only

If this were the only business that ever stated that Maine was a hard to state to do business in, then Rep Hinck would be more believeable. However, you would be hard pressed to find a business that didn't think that way.
The major thing that Maine's legislation has ever done to "protect Maine" is to make it so unfriendly towards business that none of them want to relocate here. Maine didn't do didily to protect the environment until the EPA came along and forced them. So the legislature can't take the bows now.
Poland Spring is intelligent enough to know that a 1/2 cent turns into 3 cents whenever the legislation has a shortfall.

scott's picture

I may not know the ins and outs

of Poland Spring but the state of Maine is greedy and wants to tax everything in sight.

wingnut56's picture

sandy was dandy

I remember the days of sandy roads us kids had to peddle our bikes through to get to Range Pond to go swim'in and stop in the woods on the way and pump a hand well dripping of ice cold water, soak our heads, and guzzle brain freeze. There was no gate charg'in money, no state park, no tar road to the upper or lower, no noth'in. Just woods and a curvy up and down sandy road.

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