Government raises ‘vice’ taxes to spend on health…
The finance minister said the proceeds from these tax increases will go to finance rising spending in health coverage in 2010 and beyond, so the effect on the government’s budget deficit will be neutral.
The Colombian brewing industry spoke out strongly against the increases.
Brewer Bavaria, which is owned by SABMiller, said that it will respond to the tax rise by cutting costs. It would not rule out job cuts either.
In addition it will raise the price of beer by about 100 pesos (5 U.S. cents) per bottle.
Bavaria is by far Colombia’s largest brewer, with a 97.5 percent market share.
In Latin America, SABMiller’s lager volumes grew by 4 percent in the third quarter, with Colombia in particular growing 6 percent. Bavaria reported a consolidated net profit up 41 percent year on year to 190 billion Colombian pesos (USD 97 million) in the third quarter of 2009.
