Shares of quick service restaurants such as Jubilant FoodWorks and Westlife Development plunged on Friday on reports that Kerala government has imposed 14.5 per cent 'Fat Tax' on junk food.
Shares of quick service restaurants such as Jubilant FoodWorks and Westlife Development plunged on Friday on reports that Kerala government has imposed 14.5 per cent ‘Fat Tax’ on junk food.
Jubilant FoodWorks which runs Domino’s Pizza plunged as much as 3.63 per cent, while Westlife Development, the parent company of fast food multinational McDonald’s west and south India franchisees, slid as much as 7.7 per cent.
Jubilant FoodWorks has only 15 stores in Kerala and total 1,026 stores in India.
CPI(M)-led LDF government in Kerala presented its budget for 2016-17 on Friday in which it proposed a slew of new tax proposals including five per cent tax on certain packed foods and a ‘fat tax’ of 14.5 per cent for burgers, pizzas and pastas served in branded restaurants.
Denmark and Hungary are the countries which have already fat tax in place.
Later, Jubilant FoodWorks and Westlife Development shares closed 2.56 per cent and 2.17 per cent down at Rs 1181.15 and Rs 244, respectively.
The government also imposed 5 per cent tax on packaged Basmati rice and coconut oil.