AB InBev has been banned from selling beer in India’s capital (New) Delhi for the next years. The company was accused for allegedly evading local taxes. In 2016 the local police conducted inspections and had found bottles of beer from SAB Miller which used duplicate barcodes to lower payments of excise duties. SAB Miller was acquired the same year by AB InBev which transferred the problem to the world’s leading brewer.
Delhi requires brewers to provide beer bottles with unique bar codes in order to be able to check whether the local excise duties have been paid or not. In a first inspection in 2016 twelve bottles were found that still should have been in the SAB Miller distribution centre according to their barcodes. A second inspection a few months later found bottles with an identical bar code.
The Delhi city authority therefore put AB InBev on a "blacklist" for three years and sealed two of AB InBev's warehouses in the capital city. "This means the company is debarred from Delhi market for all purposes, unless they appeal against this," an official told Reuters.
The appeal has been filed in the meantime and AB InBev said it has done nothing wrong. "Integrity and ethical business are part of our core values,” a spokesperson of AB InBev told Belgian newspaper De Standaard. “We look forward to giving our vision in collaboration with the official authorities."
Should the lockout remain for longer, AB InBev could be severly hit in one of India’s largest beer markets. The company is the second largest beer producer in India, with a market share of 17.5 % in a USD7 billion beer market and Delhi is one of the key markets for premium beers like Budweiser, Stella Artois, Hoegaarden or Leffe.
AB InBev was already part in an investigation of alleged price-fixing between AB InBev, Carlsberg and United Breweries. Last October, the Indian offices of the three brewers were raided by the Competition Commission of India (inside.beer, 12.10.2018). The commission found e-mails that showed executives regularly discussed beer prices, potentially violating Indian anti-trust laws.Since AB Inbev sought protection under the whistleblower-protection scheme after reporting the industry cartel to the officials, only Carlsberg and United Breweries face severe penalties, which could sum up to US$279 million for the group as a whole (inside.beer, 13.12.2018).