Colombia: Governor of Colombian province says SABMiller-owned Bavaria owes a fine worth US$75 million

Bavaria SA, the Colombian largest brewery, informed October 28 that it reportedly saw US$75 million (€60 million) in bank accounts frozen all over Colombia, as a result of a tax argument with a Colombian province, the International Herald Tribune learned October 28 from the Associated Press.

The governor of Atlantico province, located on the Caribbean coast, claims that Bavaria, a unit of London-based SABMiller PLC, owes as much as US$800,000 (€630,000) from a new tax implemented in 2001. The province is demanding the company pay a fine of US$75 million (€60 million) to settle the dispute.

Fernando Jaramillo, Bavaria's general secretary, said October 28 "the penalty is out of proportion with the amount they say we owe."

Bavaria contends the province's tax on 0.1 percent of the companies' sales is unconstitutional, but the levy has already been upheld by a provincial court. The company is now appealing the decision.

"We cannot pay salaries and suppliers," said Jaramillo. "I'm still calculating how much money all this will cost us."

Carlos Rodado, Atlantico's governor, was not immediately available for comment.

In 2005, SABMiller bought 97 percent of Bavaria for US$9 billion (7 billion euros) from Julio Mario Santo Domingo, the country's wealthiest man, and minority shareholders.

01 November, 2006