Heineken to delay Brazil investment after tax hike
RIO DE JANEIRO |
RIO DE JANEIRO (Reuters) - Heineken Holding NV (HEIO.AS), the world's third-largest brewer, will delay investments in Brazil after the government raised taxes on beer, the Agencia Estado news agency said on Saturday.
An increase in beer taxes to 20.8 percent from 17 percent starting in October will hurt Heineken and other companies that brew beer in Brazil. Brewers are already suffering from soaring costs due to a decline in the value of Brazil's currency against the dollar, the agency said, citing Paulo Macedo, vice president for corporate relations for Heineken Brasil.
About 60 percent of Brazilian brewers' costs are in dollars because they must import raw materials, Estado cited Macedo as saying. Netherlands-based Heineken is the fourth-largest brewer in Brazil.
The real has weakened 8.1 percent against the dollar this year and is the second worst performer of the 36 most-traded against the dollar after the Romania's Leu.
Last year Brazilian brewers' sales fell 2 percent from 2010, and they continued their decline early this year, falling 1.6 percent in the January through May 2012 period compared with the year-earlier period, the paper reported.
Macedo declined to say how much Heineken planned to invest in Brazil this year, but told the agency that the cold beverage industry planned 7.9 billion reais in investments. (Reporting by Jeb Blount; Editing by Philip Barbara)
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