The Hindu Business Line : SABMiller, Shaw Wallace to seek tax rationalisation

Ms Komal C. Wazir, Executive Director, Shaw Wallace, speaking to Mr Graham Mackay, Global Chief Executive, SABMiller Plc, at a dinner hosted by Ms Wazir in Mumbai.

Bangalore , Feb. 15

THE visiting global Chief Executive of SABMiller Plc, Mr Graham Mackay, and the Shaw Wallace top brass led by the Executive Director, Ms Komal C. Wazir, reviewed the progress made by the beer joint venture in Mumbai on Friday.

Mr Mackay, who spearheads the $9-billion brewing giant, earlier in the day visited the headquarters of Shaw Wallace Breweries Ltd (SWBL) in Bangalore.

This was Mr Mackay's first visit to India since last summer when SABMiller formed a joint venture with Shaw Wallace in what has been touted as the largest international collaboration known to India's alcoholic beverages industry. SABMiller invested nearly $133 million to pick up 50 per cent stake and management control in SWBL. The 50:50 joint venture combines the brewing interests of both the partners to form a beer entity with 35 per cent market share, which is the second largest in the domestic market after the UB group.

The two partners decided to initiate dialogue with various State Governments and work towards rationalisation of taxes for tapping the enormous potential that beer holds in India. Both parties agreed that there are a number of regulatory and infrastructural challenges that need to be addressed in order to exploit the full potential of the market.

"The policy environment in India is currently built around the premise that beer should be treated in the same manner as other liquor types such as spirits. In most countries, alcoholic beverages are taxed in proportion to alcohol by volume resulting in reasonable prices of mild beverages like beer," said Mr Mackay.

Ms Wazir said, "Just fifteen years ago beer was almost unknown in China, today they are the world's largest beer market, with the per capita consumption at almost eighteen litres over an enormous population base. If we are able to achieve a more rational regulation of the industry, I am sure we could raise the per capita consumption manifold from the paltry half a litre per annum as at present."

"I am glad we have been able to integrate the SABMiller and Shaw Wallace cultures very well over the past nine months. Nearly 1,300 employees have been organised into a single force. The manufacturing footprint of Shaw Wallace and SABMiller interests has also been aligned without any disruption, whatsoever. In the coming months we hope to see improvements in quality, productivity and scale benefits," Ms Wazir added.

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