COLOMBIA: Bavaria bank accounts frozen

By just-drinks.com editorial team | 30 October 2006

A province in Colombia has frozen US$75m in bank accounts held by the country's largest brewer Bavaria after a court found the company owed up to $800,000 in tax.

The brewer, owned by London-listed brewing giant SABMiller, has been embroiled in a dispute with the Atlantico province for five years after the provincial government implemented a new tax in 2001.

Bavaria has argued that the tax is unconstitutional but a local court has ruled in favour of the province, which claimed the company owed up to $800,000 in tax arrears.

However, the provincial government is demanding Bavaria also pay a fine of $75m on top of the tax bill and has frozen the brewer's bank accounts.

Bavaria is said to have enough working capital to continue to trade in the region but is seeking legal advice on whether to appeal the ruling.

An SABMiller spokesman in London refused to comment when contacted by just-drinks today (30 October).

Last year, SABMiller paid US$4.8bn for a majority stake in Bavaria, Latin America's second-largest brewer, which dominates beer markets in Colombia, Peru, Ecuador and Panama.

Sectors: Beer & cider

Companies: Bavaria, SABMiller