Fazer considers relocating confectionery factory from Lahti to Sweden due to proposed candy tax

Fazer is considering relocating its planned confectionery factory from Lahti to another location. The CEO, Christoph Vitzthum, revealed that the investment of €750 million in Lahti is currently on hold due to a proposed candy tax by the government. The uncertainty surrounding this tax change is significant enough that the company is hesitant to proceed with the investment.

Vitzthum suggested that the chocolate factory may end up being constructed in Sweden instead of Lahti, or potentially scaled down if it remains in Finland. The administration led by Petteri Orpo decided last spring to raise the value-added tax on sweets and chocolate from 14% to 25.5%. The parliamentary discussion on the legislative proposal to increase the candy tax is scheduled to begin after Christmas, with the law expected to take effect next June.

Fazer plans to appeal the candy tax to the EU once Parliament has made its decision, according to Vitzthum. In addition to the tax increase, the company has faced challenges in recent years, including the impact of Russia’s invasion of Ukraine and a prolonged rise in cocoa prices, which is a key ingredient in chocolate production.