E-Malt.com News article: Belarus: Heineken blames losses on high taxes

Loss-making activity of Belarusian enterprises of Heineken is caused by the increase in the size of tax payments, Heineken General Manager in Belarus, Alexei Chernyaev, was quoted as saying by Telegraf on September, 2.

Mr. Chernyaev said he expected the unit’s loss in 2010 “will be comparable with the size of additional tax burden."

Heineken owns two breweries - Syabar and Rechitsapivo - in Belarus. In the first six months of this year, Syabar's losses totaled Br11.02 billion, and those of Rechitsapivo - Br1.16 billion.

"Excise tax's raising from January 1, 2010 led to an increase of this kind of payment by more than Br4.5 billion for H1. Property tax, increased in May, raised this kind of payment by more than Br52 million,” Alexei Chernyaev noted.

"The increase of gas prices and electricity tariffs led to the growth of the costs of almost Br707 million and this growth continues," Mr. Chernyaev added.

“It is extremely important for the state to create favorable and foreseeable conditions for the development of the domestic brewing industry,” the GM said.

High barley prices controlled by the government do not contribute to the competitiveness of Belarusian brewers in domestic and foreign markets, he noted.

“So, it is highly important to take into account international prices and view as reference points Russia, Ukraine and EU member countries, our major rivals in the domestic market, in setting prices,” Mr. Chernyaev said.

At the same time, he noted positive pricing trends in Belarus this year.

“Barley purchase prices have been cut a bit this year, which is already good,” he said. “But the 2010 crops will be used in production only next year.”

While commenting on the company’s short-term plans, the general manager said that the focus would be placed on the production of import-substituting brands. “We want to offer Belarusian consumers European beer brands,” he said.



03 September, 2010