Calling Time - ActionAid

xxx how SABMiller AvoidS tAx
in developinG CountrieS
The marketing of SABMiller’s beers is all about
their national origins. Castle, now brewed in nine
countries and sold in 40, is “South Africa’s national
beer”. 37 Among the company’s four global brands
are Grolsch – “a true Dutch beer based on a recipe
and brewing secrets passed down from generation
to generation”, 38 and Peroni Nastro Azzurro –
“exemplifies the traditions of Italian craftsmanship,
passion and flair upon which it was formed”. 39
Yet for SABMiller, the reality is much more
complex. British Grolsch drinkers are drinking beer
produced by an American company, under license
from a British multinational with South African
origins. The rights to Castle beer are held in the
Netherlands, while the Peroni brand is owned by a
group company in the Isle of Man.
Welcome to the brewing industry, 21st centurystyle,
a world in which four massive conglomerates
control almost half of global consumption, and
make three-quarters of the profits. 40 It’s a world
in which much of a company’s market value can
rest on the value of its brands, yet this value can
be totally divorced from the operation of brewing
itself and squirreled thousands of miles away in
a tax haven. 41
fouR CoMPAnIeS ConTRol AlMoST A hAlf
of globAl beeR ConSuMPTIon AnD MAke
ThRee-quARTeRS of The PRofITS
20 Calling time
Multinational companies of this size are complex
entities made up of hundreds of individual
companies. It has been claimed that 60% of all
world trade takes place between companies that
are part of the same group. 42 These transactions
play an important role, not just in distributing goods
and services between group companies, but also
in distributing profits and tax liabilities.
Yet the system by which they are regulated
provides ample room for companies to shift their
profits away from countries in which they would
incur a higher amount of tax, and towards those
in which the liability is much lower, all without
breaking the law (see Box 6). These payments can
reduce or even eliminate profits in one place at a
stroke of an accountant’s pen; a kind of financial
alchemy that can also shrink a company’s tax bill.
ActionAid looked at the accounts of a sample of
eight SABMiller subsidiary companies across five
African countries – Ghana, Zambia, Tanzania,
South Africa and Mozambique – and India.
Combined with research into the taxation systems
of these countries, we were able to estimate
the amount of tax the company saved in those
countries through four different tax-dodging
techniques. All of these techniques are based on
payments – and therefore the transfer of profits –
into tax havens.
Breweries
Bottling & desalination plants
Tax haven subsidiaries