ActionAid exposes tax dodging by beer giant SABMiller
Marta, a small scale shop-keeper in Accra, Ghana, paid more tax last year than the multinational alcohol industry giant SABMiller. The beer producer is located next door and provides the small shop with their products.
SABMiller is playing the system to avoid paying its fair share of tax in developing countries.”
Martin Hearson, tax specialist, report co-author, ActionAid
All together an estimated £20m of taxes from SABMiller are missing in Africa and India every year – enough money to educate a quarter-of-a-million African children, according to ActionAid’s new report.
The report, “Calling time: why SABMiller should stop dodging taxes in Africa” reveals for the first time how the beer giant, the world’s second biggest beer producer, uses a complex system of tax havens to siphon profits out of subsidiaries in developing countries, depriving those governments of significant amounts of tax revenue that they could invest in health and education to benefit the people.
Martin Hearson, a tax specialist at ActionAid and the co-author of the report, said:
SABMiller conducts its tax affairs behind a veil of secrecy. The company and its subsidiaries siphon money away from African countries and into tax havens in Europe, where the tax rates are far lower. SABMiller is playing the system to avoid paying its fair share of tax in developing countries.“
Martin Hearson, tax specialist, report co-author, ActionAid
One way in which SABMiller avoids paying its fair share of taxes is holding valuable trademarks for African beers in Europe rather than in their country of origin. African breweries like the one in Ghana, which are subsidiaries of SABMiller, actually pay to another of the company’s subsidiaries – in the Netherlands – for the use of trademarks like Castle Beer. This is one of the beer giant’s flagship brands in Africa. The cost of using the trademarks helps eat into the profits in the African subsidiary, so less tax is paid there. Other ways of avoiding tax include paying “management fees”, mostly to Switzerland, and routing its procurement services via a subsidiary based in Mauritius.
Big Alcohol often claims that the economic benefit of their business is valuable to the countries where they operate in. But the truth is: Alcohol companies, such as SABMiller cause serious harm and leave societies to pay for it – externalizing the vast costs of their operations.
For instance, in Ghana the SABMiller subsidiary Accra Brewery has paid corporation tax in only one year during the four-year period between 2007 and 2010.
For further reading
ActionAid exposes tax dodging by UK brewing giant SABMiller, owners of Grolsch, ActionAid
Calling time: why SABMiller should stop dodging taxes in Africa, full report from ActionAid (PDF)
SABMiller plc responds to ActionAid’s report on tax in developing markets, press release from SABMiller
Brewer accused of depriving poor countries of millions in revenue, The Guardian, UK
