E-Malt.com News article: Brazil: Ambev may be forced to close down breweries in Sao Paulo if state raises taxes on beer

Ambev will re-evaluate its production capacities in the state of Sao Paulo if the state’s government goes ahead with its plans on increasing the ICMS taxes on beer (Imposto Sobre Operações Relativas à Circulação de Mercadorias e Serviços de Transporte Interestadual de Intermunicipal e de Comunicações is a value-added tax on sales and services and applies to the movement of goods, transportation and communication services, and to the supplying of any goods), Ambev’s Finance Vice-President Nelson Jamel was quoted as saying by Globo on October 30.

“We are already going through a very challenging period with cost rises in many areas… If this [rise in taxes] is approved, it will certainly have impact on prices and sales volumes. Depending on the impact on the volumes, we surely can even be forced to shut down plants,” he said.

Sao Paulo governor Geraldo Alckmin is proposing to increase the tax on beer from the current 18% to 23%. If approved, this may lead to laying off 450 thousand employees within the industry and to closing of 85 thousand bars and restaurants in the state, the Brazilian Association of Bars and Restaurants said.


04 November, 2015