The new tax bill places export duties on coal by up to 10% and petroleum by up to 15% depending on commodity prices and raise taxes on Colombians earning more than $2,000 per month (10 million pesos, precisely). The law also removes the tax deductibility of petroleum royalties paid to the government by both coal miners and petroleum producers.

With petroleum and coal being Colombia’s most economically important exports, the shock drove the peso, already down 25% the past year, to a historically low $5,070 COP to the USD. Finance Minister José Ocampo complained that the markets were “overreacting,” while defending the package saying: “This is the most progressive reform in history! There are obviously some sectors which will pay more taxes, but all have high earnings.”

Dividends will be taxed at 15% and the wealth tax will be 0.5% on assets exceeding 3 billion pesos, 1% on assets over 5 billion pesos, and 1.5% on assets over 10 billion pesos.

A new 5% tax is imposed on digital streaming services such as Netflix and HBO Max with at least 300,000 subscribers in Colombia. This is not restricted to video, but also applies to audio streaming and web portals.

The Senate bill must go through a reconciliation process with the house bill before the president signs the final version.

The Petro administration sought to impose a 20% tax on churches, but that measure did not pass congress in the heavily Catholic country. Colombia already has a Value Added Tax (VAT, or IVA in Spanish) Taxes were also rejected on bread, sandwiches, crackers, honey, milk and yogurt, but will be placed on the following foods:

• Other dairy products besides milk and yogurt
• Sausages, meat, offal, insect-based food (ants are a famous snack with some Colombians)
• Prepared or preserved meats
• Confectionery items
• Chocolate, basic and prepared
• Baking and pastry mixes
• Cereal
• Pastries and bakery products
• Jams, marmalades, and jellies
• Ice cream

Above photo: Colombia’s taxation chief Luís Carlos Reyes (left) & Finance Minister José Ocampo in congressional chambers (photo: Twitter account of President Gustavo Petro)

Alpina says that the investment opens the doors to the US west coast; the region alone has an economy ten times the entire Colombian economy. Both companies have confirmed that Clover Somona’s management team will remain intact.

Ernesto Fajardo, Alpina’s president.

“At Alpina we are always exploring new opportunities to continue growing and to create opportunities for internationalization. We seek to generate capacity and carry our knowledge to other places. In Clover Sonoma, we found an ally with whom we share values, principles and ethics; a committed team with whom we have identified the vision of the importance of innovation, differentiation, and value creation for the consumer. In both companies, we work to satisfy the necessities and tastes of our consumers, honoring the value promises that we have identified,” said Ernesto Fajardo, Alpina’s president.

“As we look to innovate and grow our brand in new markets, the Clover Sonoma leadership team and I have been looking at opportunities that will support that growth,” said Clover Sonoma Chairman of the Board Marcus Benedetti. “Like-minded companies have to work together to innovate for our consumers and to support our farmers and communities. As a company, we are strengthened by this partnership to facilitate growth, and the opportunities it provides for our employees, family farms, retail customers, and consumers.”

After WWII in 1945, Alpina was founded in Bogotá, Colombia by two Swiss immigrants Max Bazinger and Walter Goggel who started a dairy in Colombia to share Swiss traditions and to create new traditions and products that met the needs of Colombian families. Alpina has grown to have a presence in more than 20 countries in Latin America.

Alpina’s portfolio has more than 600 SKUs including aged cheeses, milks, yogurts, functional dairy beverages, vegetable-based beverages, baby food, nutraceutical and food supplements, among others. The company is the largest dairy producing company in Colombia and one of the most beloved brands with more than $700 million in sales.

Clover Sonoma’s milk production and manufacturing will remain in the U.S. with the support of Clover Sonoma family farms. Headquartered in Petaluma, California, Clover Sonoma is a Certified B corporation and humane-certified. Each year, the company gives back at least five percent of its profits to support animal welfare, sustainable practices, and local community initiatives.

Baker McKenzie advised Alpina on the deal. The law firm’s negotiating team was led by partners Carolina Pardo (Bogota, Colombia) and Darcy Down (Los Angeles) and supported by associates Justin Bryant (Palo Alto), Jonathan Farrokhnia (Dallas), Sean Turner (San Francisco) and Pantea Faed. (San Francisco). Kai Kramer (Houston) and Ross Staine (Houston) who provided tax and structuring advice.

“We are delighted to have acted as advisors to Alpina in a partnership with a company that shares its vision for the future of dairy, sustainability and product innovation,” said Darcy Down, partner in Baker McKenzie’s Los Angeles office.