Thank you, Mr Tax Man
InBev’s second-quarter profit 2008 climbed 8.6 percent despite flat sales and higher costs. Why? Because InBev paid less tax.
On 14 August 2008 InBev reported a net profit of EUR 542 million for the three months ending 30 June 2008, rising from EUR 499 million for the same period in 2007.
This was largely thanks to major savings on income tax. During the second quarter this year InBev only paid EUR 63 million in income tax compared to the EUR 166 million it paid in the second quarter last year.
In the second quarter sales were down 0.3 percent to EUR 3.71 billion from EUR 3.72 billion. InBev admitted that its focus on the lucrative premium brand made it lose market share (and volume) on lower-priced beers, especially in central and eastern Europe. Sales of higher-quality brands were not sufficient to offset the losses in terms of low-price brands that are half the market in central and eastern Europe.
The company said it was "far from satisfied" with its performance this year despite picking up from an 11-percent drop in profit in the first quarter.
The company plans to spend more on marketing its global brands -- Stella Artois, Beck’s and Leffe – and a large range of local stars.
Beer volume sales in western Europe were down 5.5 percent as the economy slowed. U.S. volume sales hardly moved.
InBev said it would tackle falling sales in Britain -- the main market for its Stella lager -- by launching a lower-alcohol Beck’s beer by the end of the year.
The company also sold less in Russia and central Europe -- down 3 percent -- on tougher competition from Carlsberg/Baltika. But Brazil, a key market where InBev supplies some two-thirds of all beer, seems to be back on track after a weak start to the year.
