NEWS
BUDWEISER AND SISTER BRANDS BANNED BY DELHI FOR ALLEGED TAX EVASION
By Susan Lewis
3-8-2019
The excise department of India’s Delhi state government has banned the world's biggest brewer Anheuser-Bush InBev (AB InBev) from selling its products for three years for allegedly evading excise duties.
The banning order has become effective this week, affecting brands including Budweiser, Corona, Hoegaarden and Stella Artois.
The ban only covers new supplies, beers already on the shelves are still being sold in Delhi shops.
AB InBev has denied the allegations and said they would fight the order. “We deny the allegations set out in this order and look forward to presenting our views in full cooperation with the excise appellate process,” said the company’s India spokesperson in a statement, “we look forward to receiving a fair hearing on this matter.”
Reuters news agency, which broke the news, reported that the order was issued after a three-year investigation on brewer SABMiller, which was acquired by AB InBev in 2016 for USD79billion.
In a 19-page document issued by Delhi authorities on 16 July seen by Reuters, it was said that: “The barcodes were being duplicated by SABMiller and supplied to the retail outlets to evade payment of excise duty.”
Authorities alleged that multiple bar codes were made intentionally to avoid local excise duty, which is levied at around 150%. Indian tax regulations stipulate that every bottle of alcohol must have a unique barcode that is traceable at every stage until being sold to consumers.
Responding to the allegations, AB InBev said it has stopped working with the Delhi warehouse that handled the bottles and is "taking steps to enhance our systems".
According to Reuters, Delhi authorities has sealed two of AB InBev's warehouses.
Delhi authorities believed that AB InBev, through its 2016 acquisition of SABMiller, is legally responsible for SABMiller's misdeeds.
AB InBev has a huge debt load of USD100billion which was mostly accrued through the purchase of SABMiller.
The company had planned to list its Asia-Pacific business in a Hong Kong IPO worth USD9.8billion last month, but had to call off because of weak demand.
Also last month, the company announced the sale of its Australian subsidiary, Carlton and United Breweries, to Japanese drinks giant Asahi for AUD16billion. The proceeds will be used to pay off its debt.
(the writer can be contacted at: SusanLewis@thewinechronicle.com)
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