MolsonCoors: Misleading Customers, Dodging Taxes
MolsonCoors, the multinational corporation owning the beer bran Carling, has dodged a £50 million tax bill, per reports. MolsonCoor’s involvement in the tax tribunal over a £50 million tax bill brought to public light that the beer producer had misled customers and tax authorities over the lager’s strength.
MolsonCoor is the fourth largest beer producer in the world.
The bad news: shady but not illegal
The multinational corporation was taken to the tribunal by Her Majesty’s Revenue and Customs (HMRC). Molson Coors won the case but it emerged during the hearing that even though it says on cans and kegs of Carling that its alcohol strength (ABV) is 4%, the ABV is actually less.
Carling is marketed in the UK at 4% ABV, but MolsonCoors has admitted it is in fact weaker for tax reasons. Court documents reveal the lager has been made to a strength of about 3.7% for the past five years.
Miseading customers, MolsonCoors did not update the ABV information on Carling labels, in order to be able to charge higher prices for the product. The brewer insists customers have not been misled and its labelling was ‘entirely consistent with the law’.
The good news: alcohol taxation works in reducing alcohol use
Philip Rutherford, vice-president of tax for MolsonCoors Europe, told the tribunal that the brewer had cut the tax it owed by lowering the alcohol content.
Despite the brewer’s successful appeal, the court made several ‘recordings of fact’ – including that the firm did not change the alcohol content on the label so it could make the savings without alerting their customers.
In other cases, Heineken has reduced the strength of John Smith’s Bitter from 3.8% to 3.4%. Strongbow cider has gone from 5.3% to 5%, while lagers Stella Artois, Cobra, Budweiser and Carlsberg Export all have fallen from 5 to 4.8% – which shows that the alcohol industry reacts to alcohol taxation measures and that less alcohol is being consumed subsequently.
