ActionAid report points finger at SABMiller tax avoidance
You have to give it to ActionAid: their campaign is clever and memorable. No marketing exec with a six figure salary could have done it better. The campaign, created in-house by ActionAid’s campaigns officer Chris Jordan in conjunction with agencies Buzz and Neo, demands that the brewer behind beers such as Grolsch and Peroni stops using tax havens and tackles tax avoidance.
Press ads in the national UK newspapers featured a swing top bottle of Grolsch with its labelling replaced by the word “Schtop”. The press ads stated: “Premium Taste… Premium Tax Dodging. SABMiller, owner of Grolsch, siphons millions into tax havens.”
In an online video on the charity’s website, a couple order two bottles of Grolsch from a bar. The barman then drinks out of the bottles and pours some in a dog’s bowl of nuts.
As the woman moves to drink from the bottle, a voiceover states, “Stop, you wouldn’t swallow it, so why should poor countries? Grolsch’s owner SABMiller is dodging millions in taxes around the world.”
Both ads direct consumers to the ActionAid website at www.actionaid.org.
ActionAid makes clear that it is not accusing the brewer of breaking the law. It states that “the lucrative search for ways to pay less, creating complex corporate structures, routing money through opaque tax havens, and employing highly paid professionals to find loopholes, is legal: indeed, it is so common it is accepted as the normal way of doing business. And it gives multinational companies a distinct advantage over their local competitors.”
SABMiller refuted the allegations, saying that “compliance with tax laws underpins all of our corporate governance practices. We actively engage with revenue authorities and we are open and transparent with our affairs. We follow all transfer pricing regulations within the countries in which we operate and the principles of the OECD guidelines.”
However, there’s a difference between “legal” and “legitimate” and the difference is ethics. And this is where ActionAid’s campaign really stings.
The difficulty with this tax issue is that it is highly political. It may be legal what SABMiller does, and therefore they don’t break any laws. It just looks awkward when something like this is disclosed as it reflects badly on the overall image of the group.
Tax consultants that we have contacted said they would not be surprised at all if the SABMiller legal structure is such that profits accumulate in the country with the lowest tax rate while losses get accumulated in those jurisdictions that allow for the biggest off-sets against profits.
Accounting and tax rules are a difficult area indeed, especially on a global level, where companies like SABMiller operate.
For example, Merrill Lynch, before it was absorbed by the Bank of America, had all its losses accumulate in the UK, where the bank enjoyed the most favourable tax treatment of all its European jurisdictions.
We find it hard to comment on these things in general as most multinational companies seem to do this sort of thing.
Let’s just say that it was unfortunate that SABMiller was singled out by ActionAid as a target only because they disclose more information than their competitors.
