August 6, 2019 / 2:48 PM / 3 months ago

Delhi city government rejects AB InBev plea to temporarily lift ban - source

NEW DELHI (Reuters) - Authorities in New Delhi have rejected a plea by Anheuser-Busch InBev (ABI.BR) to temporarily lift a 3-year ban while it hears the global brewer’s appeal, a senior government source told Reuters.

FILE PHOTO: The logo of Anheuser-Busch InBev is pictured outside the brewer's headquarters in Leuven, Belgium February 28, 2019. REUTERS/Francois Lenoir/File Photo

AB InBev, the world’s largest brewer, has been barred from selling its products in the critical New Delhi market for allegedly evading local taxes, Reuters reported last week. The company has denied the allegations.

A three-year investigation by authorities in India’s capital found that SABMiller - acquired by AB InBev in 2016 for around $100 billion - used duplicate barcodes on beer bottles supplied to retailers that year, allowing it to pay lower levies.

AB InBev has appealed against the ban to the Commissioner of Excise in the Delhi city government, two government sources with direct knowledge said. The ban order was passed by a deputy commissioner of the division.

While the company’s appeal is still under consideration, AB InBev also filed a separate plea with the Commissioner for putting the ban order on hold pending appeal, but that request was turned down, one of the government sources said on Tuesday.

“The (ban) order was detailed, there was no ground to give an interim stay,” said the official, who declined to be named as the decision is not public.

AB InBev, which counts popular beer brands such as Budweiser, Hoegaarden and Stella Artois in its portfolio, said the city’s allegations dated back to 2016 before its takeover of SABMiller and it looked forward to receiving a “fair hearing”.

“We are strongly committed to operating with integrity and high ethical standards and making the City of Delhi part of our larger growth story in India,” it said in a statement.

In recent weeks, AB InBev’s senior executives, including vice president for legal & corporate affairs for South Asia, John K. Johnson, appeared before the Delhi officials who are hearing the company’s appeal, the second government source and a third person familiar with the matter said.

AB InBev is the second biggest player in India’s $7 billion beer market, accounting for a 17.5 percent market share, according to research firm IWSR Drinks Market Analysis.

The New Delhi case was sparked by a random inspection of beer bottles at a drinking spot in an upmarket New Delhi neighbourhood in 2016.

The order, issued on July 16, said it was “reasonable to believe” same barcodes were duplicated multiple times and supplied to various retail vendors in Delhi, amounting to the offence of selling non-duty paid liquor.

Reporting by Aditya Kalra; Editing by Sanjeev Miglani and Alexander Smith

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