The alcohol industry produces and promotes harmful products.

While many people are aware of the high death rates that tobacco and unhealthy food cause, fewer are familiar with the staggering burden of alcohol,” writes Prof. Nicholas Freudenberg in his 2014 book Lethal But Legal.

The alcohol industry is manufacturing disease, for example Non-communicable diseases such as cancer, cardiovascular disease, or diabetes; or infectious diseases like HIV/ Aids or tuberculosis. Moreover, the practices and products of Big Alcohol contribute to injuries and violence, to mental ill-health and suicides, and to quality of life lost, as well as premature death.

BigAlcoholBig Alcohol – consisting of producers, distributors, retailers and marketers of alcohol products – has accumulated so much financial and political power that it can block and alter public policies that protect Human Rights and that promote sustainable development, social justice and public health. The alcohol industry works to undermine, alter and block evidence-based policy measures that protect health and well-being because these policy measures would threaten the profits of Big Alcohol.

Independent scientific evidence clearly shows: The harm of alcohol use outweighs by far the benefits from “moderate use”. However, the alcohol industry works to perpetuate myths about their products and its effects, spread doubt about scientific evidence and pressure decision-makers to refrain from regulating Big Alcohol.

The alcohol industry is a big buddy of Big Tobacco. Both industries are tightly connected on the highest levels. Big Alcohol has over the years learned from the mistakes and success of the tobacco industry and takes pages out of the playbook of Big Tobacco. The alcohol industry has thus accumulated a worldwide track record of opposing and undermining evidence-based, high-impact policy measures that would promote health, well being and social progress.

Together with Big Tobacco, the food, pharmaceutical, firearms and automobile industries, the alcohol industry forms the so-called corporate consumption complex – a network of corporations, financial institutions, banks, trade associations, advertising, lobbying and legal firms that together promote “hyper consumption”.

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Mapping Big Alcohol

Brands, Corporations - mapping Big Alcohol

The global alcohol industry and its corporations and biggest brands

With non-profit classifications, deliberately confusing do-gooder names such as the International Center for Alcohol Policies and the Foundation for Advancing Alcohol Responsibility, and frequent name changes, it can be challenging to distinguish organizations with true public health motives from those with vested interests.  Through their SAPROs and industry think-tanks, the Producers position themselves ingeniously and can confuse media outlets, policy makers, alcohol scientists and the public, which often assume the information is coming from an independent reliable source.

International Alliance for Responsible Drinking (IARD)

The Global Producers seem to be taking control of the public relations battle with the public health community by securing stronger control of front organizations that can be more directly involved in their “Commitments” agenda.

ICAP’s metamorphosis seems to be a strategic maneuver to extend the Global Producers’ already sizeable power.

Who is the IARD?

It’s a lobbying front group for 12 of the largest multinational alcohol corporations – a merger of ICAP and GAPG. It’s a lobbyism giant for the alcohol industry, covering all three industry branches – wine, beer and liquor – and representing the majority of global regional alcohol brands. Many of these corporations are interconnected on their own part (shown by the violet color code). So, what’s the political agenda of IARD? Public health or the profit interests of these brands and corporations?

Mapping IARD & Alcohol Industry

IARD exposed: representing corporate brands not public health interest

International Center for Alcohol Policies (ICAP)

ICAP is registered as a non-profit, but it is funded by 15 of the world’s leading alcohol producers, most of which are the same companies that comprise the GAPG.  It was founded in 1995 by a consortium of alcohol companies, including MillerCoors, which at that time was part of tobacco giant Phillip Morris.

Who is ICAP?

ICAP_mindmap

There is strong evidence that ICAP has progressed primarily into a an industry public relations organization dedicated to the advancement of industry-favorable alcohol policies

ICAP has revealed is true colors as an instrument of the transnational alcohol producers.  If at one time the ICAP slogan of “Analysis, Balance, and Partnership” seemed persuasive to some, can anyone doubt the hollowness of these words now?

Global Alcohol Producers Group (GAPG)

GAPG represents the world’s 13 leading beer, wine and spirit producers including Beam, Bacardi, Pernod Ricard, AB InBev, and Diageo.
Since its inception, the organization has spent more than $1 million on lobbying the US government alone, taking positions that seem to be diametrically opposed to those recommended by the public health community

spiritsEurope

In 2012, SpiritsEUROPE was formed by the merger of Confederation of European Spirits Producers (CEPS) and the European Forum for Responsible Drinking (EFRD). EFRD may be better recognized by its previous name—The Amsterdam Group (TAG).  Its members include many of the same producers who make up the GAPG, including Beam, Diageo, Brown-Foreman and Pernod-Ricard.

DISCUS

The Distilled Spirits Council is the national trade association representing the leading producers and marketers of distilled spirits in the United States. DISCUS says about itself:

The Council protects the industry from higher taxes and works diligently to reduce trade barriers across the globe…

DISCUS member company Pernod Ricard has been fined 10 billion KRW for tax evasion.

The National Tax Service (NTS) found that the whiskey maker inflated costs for advertisements and other transactions so it could report lower profits and thereby avoid taxes, the sources said.

Foundation for Advancing Alcohol Responsibility

The members of the FAAR are some of the same alcohol producers that form IARD, such as Bacardi USA, Pernod Ricard USA, Diageo, Hood River, Edrington, Constellation Brands, Brown Forman and Beam Suntory.

Diageo

Diego is the world’s biggest producer of liquor.

In 2011, GAPG member Diageo, considered to be the world’s largest spirits company, reached a foreign bribery settlement with the US Securities and Exchange Commission to pay $16m to resolve allegations that it bribed government officials for over six years in India, Thailand and South Korea to boost sales and receive favorable tax treatment (US Securities and Exchange Commission, 2011).

SABMiller

SABMiller is the world’s second largest beer producer.

The civil society organization ActionAid exposed SABMiller’s unethical tax dodging schemes:

SABMiller is the world’s second largest beer company, with interests across six continents. Its brand portfolio includes the major international names Grolsch, Peroni and Miller, as well as iconic African beers Castle and Stone Lager. Africa is its heartland, the continent where it began and whose brewing industry it dominates.

Yet SABMiller group has more tax haven companies – a massive 65 – than it has breweries and bottling plants in Africa.

ActionAid estimates that SABMiller’s tax dodging schemes may have lost governments in developing countries as much as £20 million, which is enough to put a quarter of a million children in school.

AB InBev

Another member of GAPG, AB InBev, producers of Budweiser and many other brands, were implicated in the decision by FIFA to pressure the Brazilian government to allow alcohol sales at the World Cup football stadiums.  Predictable increases in violence and mayhem have been reported during the games.  Pressure from FIFA and AB InBev on Russia, host of the 2018 World Cup, has resulted in the passing of a bill which will suspend the alcohol advertising ban put in place in 2012 as part of a campaign to curb alcohol abuse and alcoholism (Baber, 2014).

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Corporate Consumption Complex

The corporate consumption complex is an intricate web of organizations including the multination corporations manufacturing the goods of consumer capitalism, retail giants selling those products, trade associations doing the political lobbying as well as advertising and law firms supporting PR and political campaigns of these industries.

Key actors are the banks, hedge funds, and investment firms that lend these corporations money, and increasingly dictate their priorities,” writes N. Freudenberg in Lethal But Legal.

Together with Big Tobacco, the food, pharmaceutical, firearms and automobile industries, the alcohol industry forms the so-called corporate consumption complex – a network of corporations, financial institutions, banks, trade associations, advertising, lobbying and legal firms that together promote “hyper consumption”.

Hyper consumption is a pattern of using consumer goods that is directly related to premature death and preventable disease.

A growing body of evidence shows: The business model and political practices of the industries forming the corporate consumption complex have become the major modifiable risk factors for today’s number one cause of premature death and disease.

The corporate consumption complex has become the most powerful force to impact human health and the communities in which humans live. It is the primary modifiable cause of the biggest cause of premature mortality in the 21st century, Non-communicable diseases.

The corporate consumption complex uses its political clout when it needs, but much of its impact is due to its success in promulgating and broadcasting an ideology that supports its values and justifies its actions, even when they have been shown to cause millions of preventable deaths,” writes N. Freudenberg in Lethal But Legal.

Market Concentration

Market concentration and market failure

A few major corporations, operating globally, dominate the alcohol market, especially the beer market but also the liquor and wine market.

Their financial power and political muscle has created a reality where the alcohol market cannot be considered in terms of neoliberal market theory – according to which markets consist of many players competing to respond to consumer preferences. The alcohol market is instead dominated by a relatively small number of global corporations whole massive spending power on both political lobbying and commercial communications creates preferences and drives growth and eliminates regulations.

The costs that consumption and production of the product cause are largely externalized. Given these facts, experts speak of “market failure” with regard to the alcohol market.

Four global waves of market concentration

In general, market concentration means greater financial power for the prevailing corporations.

The first wave of concentration takes place in the United Kingdom, with the formation of the brewery giant Allied Breweries and the liquor giant International Distillers & Vintners (IDV).

  • 1950’s: structural changes in beer, liquor industry in UK

The second wave is about the purchases of competitors or mergers of family-owned businesses.

  • 1960’s: Heineken purchases competitor Amstel; Carlsberg purchases competitor Tuborg
  • 1971: British hotel chain Grand Metropolitan enters alcohol business by purchasing IDV
  • 1971: Merger of champagne producer Moët & Chandon with cognac producer Hennessy
  • 1975: Merger of family businesses Pernod and Ricard

The third wave is about a trend away from national alcohol companies towards the formation of multinationals in Western Europe, as well as the emergence of competition for brands, in order to compete on the global markets.

  • ’85 to ’88: Purchases of national BRANDS beyond country especially in emerging markets in Africa, Latin America, Asia
  • Increased specialization within the alcohol industry due to bigger competitive pressures
  • 1987: Moët Hennessy merges with Luis Vuitton, owner of champagne brands Veuve Cliquot and Canard Duchene, to form LVMH
  • 1988: Belgian brewer Stella Artois merges with Piedboeuf-Interbrew to form Interbrew
  • American Brand takes over Jim Beam and National Distillers

The fourth wave is about cutting costs and increasing effectivity in established markets at the same as giant companies continue their internationalization and taking over successful brands.

  • Hardly any new brands have success in establishing themselves on the global market
  • 1997: Guinness and Grand Metropolitan form DIAGEO
  • 2000: Leading Brazilian beer brands form Ambev, controlling 70% of the market in the country
  • 2001: Seagram is divided up by DIAGEO and Pernod Ricard
  • 2002: South African Breweries (SAB) purchases Miller from Philip Morris (tobacco giant)

In the new Millennium the continuation of globalization and market concentration accelerates again. Increased focus on emerging markets as the markets in the West are increasingly saturated.

  • 2004: Merger between Belgian Interbrew and Brazilian Ambev, forming InBev, the world’s biggest beer producer
  • 2005: Pernod Ricard becomes world’s second largest liquor producer by taking over parts of Allied Domecq2005: Canadian Molson merges with American Coors
  • 2007: SABMiller continues expansion, in part through purchasing dutch Grolsch and in part through collaboration with MolsonCoors in the United States – to compete with Anheuser-Busch
  • 2008: InBev purchases Anheuser-Busch
  • 2008: Vin & Sprit (Swedish government owned) is sold to Pernod Ricard, in particular for the vodka brand Absolut

Most likely the mega-merger of AB InBev and SABMiller in 2016 has caused a fifth wave of consolidation and market concentration.

Accelerating an industrial epidemic

A concentration of market power also means the acceleration of the industrial epidemic caused by alcohol harm.

  • Beer: In 2010, the 10 biggest breweries controlled 66% of the market share of global sales, which means a 28% increase since 1979-1980.
  • Liquor: Top 10 corporations control 59% of the market share

Growing market control also leads to increasing marketing presence, increasing corporate political activity (lobbyism) and the buying of science, since the purchasing power of the giant multinationals is getting ever stronger.

  • 2010: The 6 biggest alcohol producers spend $2 billion on alcohol marketing

Big Tobacco Tactics

The corporate consumption complex is everywhere, all the time. Its industries operate on all levels, the local, national, and global levels in order to:

  1. Dictate the values, behaviours and lifestyle choices of people around the world.
  2. Influence the social, political and physical environments of human life.
  3. Dominate the legal, executive and legislative decision-making processes of government.
  4. Shape the activities and priorities of the media, scientists and philanthropy.

In this context, Big Alcohol is borrowing tactics from Big Tobacco, in order to pursue its agenda of creating a world where the largest multinational corporations are able to maximise their profits.

  • Big Alcohol uses the same tactics like Big Tobacco in its efforts to circumvent evidence-based, high-impact public health policies.
  • Documents show Big Alcohol and Big Tobacco work closely together, share information, share similar concerns, and use similar arguments to defend their products and prevent or delay restrictions being placed on their products.

Close Ties

Big Alcohol and Big Tobacco are big buddies. One example is that Altria Group, Inc. – the giant of the US tobacco industry – is the biggest owner of SABMiller. SABMiller is among the four largest brewers in the world and Altria Group, Inc. owns 26.7% of SABMiller shares, the biggest part of the shares with vast economic and voting interest in one of the world’s biggest alcohol companies. Altria has three seats on the 11-person SABMiller board of directors. Big Alcohol executives sit on the board of Altria in their turn.

Other tactics the alcohol and the tobacco industry share are:

  • The fabrication of evidence,
  • Aggressive lobbying, and
  • Marketing strategies, including PR agencies.

To visualise the interconnection and deep ties, the movie Thank You For Smoking provides vivid imagery and sound bites.

Evidence suggests tobacco and alcohol companies […] use remarkably similar strategies in their efforts both to market their products and prevent and delay effective public health policies, in some instances working collectively to this end,” write Gilmore and Fooks, in 2012, in a WHO Bulletin.

Profit Over Human Rights

The Universal Declaration of Human Rights outlines in its very first article the essence of humanity:

All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood.

The Constitution of the Word Health Organisation stipulates one of the most fundamental rights of human beings:

The enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being…

UN Convention on The Rights of The Child stipulates the Best Interest Principle, in Art. 3.1:

In all actions concerning children, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bo- dies, the best interests of the child shall be a primary consideration.

The practices and products, the tactics and strategies, the mode of operation of the alcohol industries causes Human Rights abuses.

One small sector of society, the alcohol industry and its allies of the corporate consumption complex, has accumulated so much power to undermine, water-down, oppose and block and increasingly even roll-back health progress.

The alcohol industry has developed and marketed products to win over new populations: teens and young adults, women, and blacks and Latinos,” writes N. Freudenberg in Lethal But Legal.

As a consequence, people in these groups are now facing increasing health and social problems that previously were not an issue.

Women and girls

Alcohol Marketing often objectifies and sexualizes women, portraying women as tools, perpetuating gender stereotypes and inequality.

Nearly 1 in 5 advertisement occurrences targeting youth in the USA contained sexual connotations or sexual objectification.

Young people

The content of alcohol ads in magazines is more likely to violate industry guidelines if the advertisement appears in a magazine with sizable youth readership.

Ads in magazines with a substantial youth readership (at least 15%) frequently showed alcohol being consumed in an irresponsible manner.

Big Alcohol increasingly uses online games that feature alcohol brands, secret parties with online invitations, Facebook and other social media to target youth.

Children

The alcohol industry starts early to train people to like alcohol. It encourages children to develop a taste for alcohol with elaborate marketing tactics. For example in Australia, Big Alcohol is marketing ”Tim Tams” (Australian candy that is popular with kids) flavored with Tia Maria, chocolates flavored with Malibu, vodka flavored lip gloss and fudge and potato chips flavored with Jim Beam whisky.

In flavoring candy popular among children Big Alcohol is exposing children to alcohol, introducing brands at an early age, encouraging familiarity with and loyalty to alcohol products.

Children in the UK, as young as 10 years, are more familiar with some alcohol brands and adverts than those for popular foods and candy.

Conflict Of Interest

There’s an obvious conflict of interest between the alcohol industry and public health objectives: alcohol harm needs to decrease on population level for better public health. But the alcohol industry wants more alcohol consumption, not less. Big Alcohol’s thirst for profits opposes societies’ objectives to improve health and well-being.

Alcohol industry-favorable propaganda is increasing with the posting of over 3500 ‘Industry Actions to Reduce Harmful Drinking’ that are designed to demonstrate Big Alcohol’s support of the WHO Global Alcohol Strategy. The problem is that the public health community’s Statement of Concern and preliminary research on the ‘Industry Actions’ demonstrates that not only are they mostly trivial, but in some cases potentially harmful to public health (Babor et al., 2013; Babor and Robaina, 2013; Babor, Robaina and Brown, unpublished).

South African Example

In South Africa, in 2012, a conflict of interest arose that involed SABMiller, The Global Fund and the South African government. SABMiller is the world’s second largest brewer by sales volume:

The government and SABMiller had entered into a public-private partnership, that was then funded by The Global Fund, for an educational intervention by the alcohol producer to reduce the spread of HIV/ Aids.

The links between alcohol use, violence (including sexual violence) and risky sexual behaviour, are well established. Alcohol is a major risk factor in the spread of HIV/ Aids. Reducing alcohol use can therefore be seen as key to reducing HIV infection. This inevitably conflicts with SABMiller’s overarching goal of maximizing profits from alcohol sales.

Statement Of Concern

In 2013, over 500 public health professionals, health scientists and civil society activists representing 60 countries issued a joint Statement of Concern about the activities of the global alcohol producers. Professor Thomas Babor, from the University of Connecticut School of Medicine, USA, led the drafting of the Statement.

The Statement of Concern was written by a group of international experts, including former IOGT International President Sven-Olov Carlsson.

The Statement was sent to WHO Director General, Dr Margaret Chan (read the letter), and raises concerns about the conflict of interest between multinational alcohol companies and public health policies designed to tackle alcohol harm. The Statement was drawn up in response to public announcements made in October 2012 by 13 of the world’s leading alcohol producers, outlining their commitments to implementing the WHO Global Alcohol Strategy.

The global public health community emphasised that industries manufacturing unhealthy commodities, such as the global alcohol producers, have no role to play in the formation of national and international public health policies.

Professor Babor commented:

Based on their lack of support for effective alcohol policies, misinterpretation of the Global Strategy’s provisions, and their lobbying against effective public health measures, we believe that the alcohol industry’s inappropriate commitments must be met with a united response from the global health community.

Profit Over Science

Big Alcohol consistently opposes high-impact policy interventions examined by independent science and research and proven to be cost-effective at a population level. The alcohol industry undermines and opposes these evidence-based policy measures, without actually engaging with the research literature in any depth.

Strong evidence is systematically misrepresented and weak evidence is promoted and emphasised.

Unsubstantiated claims are made about the adverse effects of unfavored policy measures and advocacy of policies favored by Big Alcohol is not supported by the presentation of strong evidence.

Self-Regulation Exposed

The alcohol industry’s self-regulation attempts are flawed and do not work in protecting and promoting public health and well-being. In fact, in 2010 the Health Committee of the UK Parliament examined advertising practices of the alcohol industry:

The industry’s own codes of conduct are systematically violated.

After a decade of studying Big Alcohol it was concluded in 2003 in Australia, that self-regulation and voluntary codes had failed despite the industry’s constant reassurance that the system could be bettered.

In an international analysis of involvement by so-called ”unhealthy commodity” companies (food, tobacco, alcohol, soft drinks) in health policy-making, researchers from among others Australia, Britain, and Brazil said self-regulation was failing and it was time Big Alcohol was regulated more stringently from outside.

Lobbying Exposed

Examples From Sub-Saharan Africa show the unethical lobbying of the alcohol industry.

The alcohol industry out of context in Africa

Big Alcohol claimed national policies were formulated at meetings sponsored by ICAP, the lobbying front group of the world’s biggest alcohol producers, to fit the specific needs of four different African countries.

Analysis of the plans showed the truth. These plans were found to be virtually identical, with all documents originating from the MS Word document of a senior executive of SABMiller, one of ICAP’s funders.

Mapping Big Alcohol lobbying in the European Union

A case study of the European Union shows the lobbying entry points for the alcohol industry. This map of entry points for the often aggressive and extremely well-funded alcohol industry lobbyists shows the channels of access to European Union institutions and decision-makers.

Unlimited access for Big Alcohol - lobbying entry points to EU

Unlimited access for Big Alcohol – lobbying entry points to EU

The map only shows a snapshot and not the full picture because it is impossible to illustrate the multiple law firms and consultancy firms that Big Alcohol hires to lobby on their behalf. It is also impossible to maps these entry points for the alcohol industry and their front groups for all the different countries where they maintain these networks. This map depicts EU and UK examples. Neither can we show all the organisations and corporations that are behind the conglomerates shown above.

The point is clear nevertheless: the alcohol industry possess a myriad of entry points to decision-making processes and policy-makers.

UK government under the influence

Extraordinary level of access

In its article “Alcohol and Public Health. Under the influence” from February 2014, the British Medical Journal (BMJ) exposed that documents show the Department of Health alone held 130 meetings with the alcohol industry suggesting minimum pricing consultation was a sham.

The BMJ investigation proves the “extraordinary level of access” granted by the government officials to the alcohol industry, as Big Alcohol fought successfully last year to kill off a minimum unit pricing policy in England and Wales.

The Guardian newspaper used the phrase “dancing to the tunes of the … industry” in a headline on the subject.

US government under the influence

Money buys influence, a lot

The Global Alcohol Producers Group (GAPG), a major industry lobby organization representing the world’s 13 leading alcohol producers including Beam, Bacardi, Pernod Ricard, AB InBev, and Diageo, has since its inception spent more than $1 million on lobbying the US government alone, taking positions that are diametrically opposed to those recommended by the public health community.

German government under the influence

Big Alcohol omnipresent in federal and state governments

What the abbreviations mean:

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CSR Exposed

Corporate social responsibility (CSR) is a tool for the alcohol industry to portray responsibility and care for the community. But evidence suggests that CSR strategies have concrete purposes that have nothing to do with making the world a better place.

CSR strategies by the alcohol industry are intended to

  1. Facilitate access to government,
  2. Co-opt civil society organizations to corporate agendas,
  3. Build trust among the public and political elite, and
  4. Promote untested, voluntary solutions over binding regulation.

Additionally, CSR practices, including corporate philanthropy, have also been used to create divisions among public health professionals.

Tax Schemes Exposed

ActionAid, an international organisation working with over 15 million people in 45 countries and based in Johannesburg, South Africa, has undertaken an investigation of SABMiller’s tax practices. ActionAid works for a world free from poverty and injustice. For its investigation it used published financial information, interviews with government officials and undercover research to find out how SABMiller avoids tax across Africa and India.

Exploiting developing countries through tax schemes

ActionAid estimates that SABMiller’s tax dodging schemes may have lost governments in developing countries as much as £20 million, which is enough to put a quarter of a million children in school. On the importance of tax income in any country, ActionAid writes:

Taxes pay for the fabric of our lives – our schools, hospitals and roads, for example. They bind us together in a social contract with the governments we pay them to, and who we expect to spend them well. Taxes are a necessary precondition of a functioning state, which itself is essential for economic growth and the protection of human rights.

Accra Brewery in Ghana, owned by SABMiller, has become a textbook example of the techniques used by multinational corporations like SABMiller to device schemes for avoiding corporate income taxes. Accra Brewery and SABMiller have not paid any income tax over a period of two years, but transferred millions of pounds to sister companies in tax havens. The SABMiller group makes profits of over £2 billion a year.

Tax avoidance is part and parcel of the way multinational corporations invest in developing countries. The OECD estimates that Africa loses several times more revenue to tax havens than it receives in oversees development aid.

SABMiller is the world’s second largest beer company, with interests across six continents. Its brand portfolio includes the major international names Grolsch, Peroni and Miller, as well as iconic African beers Castle and Stone Lager. Africa is its heartland, the continent where it began and whose brewing industry it dominates.

Yet SABMiller group has more tax haven companies – a massive 65 – than it has breweries and bottling plants in Africa.

ActionAid investigations have exposed that clever accounting allows the alcohol industry to siphon profits from the African and Indian companies to those in tax havens. Estimations are that these schemes help SABMiller to reduce its tax bill by as much as one fifth.

The lucrative search for ways to pay less, creating complex corporate structures, routing money through opaque tax havens, and employing highly paid professionals to find loopholes, is legal: indeed, it is so common it is accepted as the normal way of doing business. And it gives multinational companies a distinct advantage over their local competitors.

As a consequence of the investigation’s results, tax authorities in five African countries started to examine SABMiller.

Tax exemption in Brazil

Fifa, football’s embattled governing body, demands from every World Cup host eight guarantees. Point three of the guarantee catalogue is Fifa’s demand to be exempted from any kind of taxation. It means that from the time the World Cup is awarded to the hosting country until the end of the tournament, Fifa and its World Cup sponsors, including AB InBev, do not pay any taxes in the host country. AB InBev is the world’s largest beer producer.

Federal Revenue Department officials have calculated that the federal tax breaks associated with the football world cup would total around BRL 900 million (about $475 million) between 2011 and 2015.

The case is mind-boggling because AB InBev was not only exempted from paying any taxes but also forced a law change to reintroduce alcohol into Brazilian football stadiums. Alcohol had been banned to reduce and prevent violence.

Bribery for tax favors

In 2011, Diageo, the world’s largest liquor producer, reached a foreign bribery settlement with the US Securities and Exchange Commission to pay $16m to resolve allegations that it bribed government officials for over six years in India, Thailand and South Korea to boost sales and receive favorable tax treatment (US Securities and Exchange Commission, 2011).

Big Alcohol Subsidies Exposed

Taxpayers in Australia pick up $1.4 billion dollar wine tab

A report by The Australia Institute has exposed Australia’s wine tax system as corporate welfare, with Australians paying a billion dollars a year to subsidise the wine industry.

Unlike beer and spirits, which are taxed based on their alcohol content, wine is taxed on its wholesale value. As a result, cheap wine attracts far less tax than beer or spirits.

Modelling illustrates how the tax system works to subsidise cheap wine and alcohol consumption. It also shows that that if wine were taxed in the same way as beer, an extra $1.4 billion in tax revenue would be raised.

The report found that while Australia has around 3,800 wine producers 3,500 of them pay almost nothing under the Wine Equalisation Tax (WET), and many in fact receive a subsidy through an associated rebate. Just 23 wine producers paid nearly 90% of the $800 million raised by the WET.

Foundation for Alcohol Research and Education (FARE) Chief Executive, Michael Thorn says the WET is corporate welfare at its worst:

Most Australians pay more personal income tax than these wine producers and wholesalers. It simply beggars belief that ordinary Australians continue to foot the bill for the significant health and social costs of alcohol, while the majority of wine producers are profiting from favourable tax arrangements that encourage production of cheap alcohol.