Cantons bicker over Carlsberg relocating its procurement division

When Carlsberg announced at the end of 2011 that it was establishing in Switzerland a centralised supply organisation for Europe, incorporating group procurement, supply chain and logistics functions, Swiss officials rubbed their hands. The small country in the heart of Europe has received so much bad press lately because of its banks that Carlsberg’s decision was most welcome, as it signalled that Switzerland still bested the rest of Europe when it comes to low corporate taxes.

Traditionally, low taxes have been one of the key reasons for companies to set up shop in one of Switzerland’s 26 cantons (i.e. member states). Unfortunately, they are not uniformly low, with some cantons having much lower taxes than others.

That’s why Carlsberg’s announcement on 31 August 2012 to move its supply organisation to the town of Ziegelbrücke, canton Glarus, was met with scorn by Swiss officials in canton Aargau, where Carlsberg has a major brewery in the town of Rheinfelden. The two towns are only 140 km apart – Rheinfelden lies 70 km to the northwest of Zürich and Ziegelbrücke 70 km to the southeast of Zürich – but in Swiss terms that’s worlds apart.

Carlsberg said that it would create 200 jobs in Ziegelbrücke, while axing 50 jobs in Rheinfelden, as it seeks to integrate its previous procurement unit in Rheinfelden into the new one in Ziegelbrücke. The 50 employees affected can move to Ziegelbrücke, should they want to, Carlsberg said.

Aargau officials huffed and puffed and blamed federal lawmakers, who had created tax loopholes for certain cantons in 2008. Under this law, canton Glarus, which is deemed economically weaker than the prosperous canton Aargau, has been granted permission to attract investors with significant tax cuts that can run up to 50 percent. Aargau, on the other hand, does not enjoy this competitive advantage.

Although neither Carlsberg nor officials in canton Glarus would say what the terms of their agreement are, officials in Aargau tapped their noses and let it be known how displeased they are with canton Glarus.

Carlsberg is not the only global brewer to have moved certain back-office functions to Switzerland. SABMiller’s regional office for Europe is located in Zug, canton Zug, just to the south of Zürich.