Gummy Bear Maker HARIBO Scores Wisconsin Tax Credits

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By Michael J. Bologna

Wisconsin will provide $21 million in income tax credits to HARIBO of America Inc. as part of a package accommodating the candy maker’s plan to build and operate a 500,000-square-foot plant in southeastern Wisconsin, officials said Aug. 23.

The Wisconsin Economic Development Corporation (WEDC) said it had reached an incentives agreement with Rosemont, Ill.-based HARIBO, the U.S. subsidiary of the German confectionery giant known for its fruit-flavored gummy candies including Gold-Bears.

Earlier this year HARIBO announced a plan to locate its first North American manufacturing facility in Pleasant Prairie, Wis. The company expects to hire approximately 385 production workers.

“Having a global company like HARIBO establish operations here will have a significant economic impact on Kenosha County, southeastern Wisconsin and the entire state,” Mark Hogan, CEO of WEDC, said in a news release. “This is another example of how Wisconsin is attracting companies from around the world because of our business-friendly climate, dedicated workforce, world-class education system and reliable infrastructure.”

Development Hub

With the recent HARIBO announcement, southeastern Wisconsin is becoming a major economic development hub for the state. In 2015, Amazon.com Inc. opened a one million-square-foot fulfillment center in Kenosha, Wis. WEDC granted the e-commerce giant $10.3 million in tax credits over 11 years.

Last month, Foxconn Technology Group announced plans for a $10 billion manufacturing campus in the region. The state Legislature is debating legislation that will provide $3 billion in tax credits, exemptions, and subsidies to facilitate Foxconn’s plan to construct a 20 million-square-foot facility for the production of liquid crystal display panels for televisions and electronic devices.

Hogan said the HARIBO incentive package includes $21 million in performance-based state income tax credits, available through 2028. HARIBO will have to meet certain investment and employment targets to receive the tax benefits. Such targets are linked to the number of jobs created; direct capital investment totals; dollars spent on equipment, goods, and services from Wisconsin companies; and dollars spent on employee training.

Under the agreement, credits earned by HARIBO would be refundable. In this context, HARIBO could receive cash payments from the state if it meets all basic investment and employment targets and owes less in income taxes than the promised incentives. HARIBO is widely expected to receive cash directly from the state because very few Wisconsin businesses pay taxes on their manufacturing profits.

WEDC believe the incentives scheme will be a good investment for the state. The agency pointed to economic modeling showing the HARIBO production facility will attract 381 permanent jobs in the region, in addition to the 385 direct jobs.

“Those 766 new jobs could generate up to $8.4 million in state income tax revenue over a five-year period,” WEDC said.

To contact the reporter on this story: Michael J. Bologna in Chicago at mbologna@bna.com

To contact the editor responsible for this story: Jennifer McLoughlin at jmcloughlin@bna.com

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