More trouble may be brewing for beer giant AB InBev, which has just been hit by a three-year ban in Delhi for alleged evasion of taxes, sources have said.
According to officials, who did not wish to be identified, Budweiser — one of the company’s most popular brands — was being promoted at a ‘Boiler Room Party’ on June 23 at a popular city hotel, which was raided by the Excise Department.
The department claims to have found multiple licence-related violations at the party, which was attended by over 5,000 people. “The beer brand was the sponsor of the event, where it was being exclusively served,” an official claimed.
“It is likely that another inquiry will be initiated against the company over alleged violations. It will not just be against Ab InBev but all stakeholders of the event,” the official added.
The Boiler Room, founded in London, is an online music broadcasting platform which commissions streaming music sessions around the world.
The ongoing ban on Ab InBev pertains to a case of alleged evasion of taxes in 2016 involving liquor firm SABMiller — acquired by AB InBev in 2016 for around $100 billion — using duplicate barcodes allegedly on bottles of Haywards 5000 and Fosters in a popular pub in the city with similar barcodes. The presence of identical barcodes on different bottles, an official claimed, means that the company paid excise duty once for the sale of multiple bottles.
A spokesperson for AB InBev India, however, said: “We work to meet the highest standard of compliance across our markets. We deny the allegations set out in this order and look forward to presenting our views in full cooperation with the excise appellate process. This order relates to operations of SABMiller dating back to 2016, prior to our takeover. Specifically it concerns an alleged mismatch in barcode status of 11 bottles of Fosters and 1 bottle of Haywards 5000 found at a single retail outlet in Delhi. After we took control, we have discontinued our relationship with the vendor that managed the relevant Delhi warehouse and are taking steps to enhance our systems. We look forward to receiving a fair hearing on this matter.”
In the latest instance, excise officials claimed, the event organisers had applied for P-13 permits, which come at a cost of Rs 5,000. However, for a party of this scale, they needed P-10 permits that cost Rs 1 lakh.
“Apart from that, entry to the event was through tickets, and liquor was being sold in the basement, for which they had no permission either from the excise or from other law enforcement authorities. The alleged tax evasion was done in multiple ways,” the official claimed.
The state government collects excise duty on alcohol, which acts as a source of tax revenue. For now, the warehouses of the company’s vendor have been sealed in the national capital, where the demand for beer eclipses hard liquor during summer months.
However, the department has allowed the company to extinguish its stocks that are in vends or in various stages of transit. AB InBev brands have a share of around 20 per cent in the Indian market, according to industry estimates.