The South African subsidiary South African Breweries (SAB) of Anheuser-Busch (AB InBev), which boosted beer volumes in the half year to June, has paid R3.5 billion of the re-assessed R4.5bn demanded by the South African Revenue Service (Sars) in settlement of a tax dispute from 2017.
The dispute between the SAB, AB InBev’s local unit, and Sars related to the taxman’s audit of the brewery company’s repurchase of an equity stake in Coca-Cola Bevereges Africa. The audit also covered the related subscription for shares in Coca-Cola Beverages Africa by subsidiaries of the Coca-Cola Company.
“The South African Revenue Service conducted an audit of AB InBev’s South African subsidiary, the South African Breweries (SAB), in relation to the 2017 repurchase of SAB’s equity stake in Coca-Cola Beverages Africa (CCBA), the Coca-Cola bottling business in Africa, by CCBA and the related subscription for shares in CCBA by subsidiaries of The Coca-Cola Company (TCCC),” said AB InBev yesterday.
AB InBev had contested Sars’ claims that it was owed R6.4bn in taxes plus penalties and interest, which it assessed at R17.7bn at the time. The dispute has now been resolved, said the company, adding that it had already made a payment in settlement of the new values.
“Both disputes have now been resolved and SAB will pay R4.5bn in respect of these South African tax matters to SARS, of which R3.5bn have been paid as of 30 June 2024,” said AB InBev.
In the half year period to June, AB InBev said its South African “volumes grew by mid-single digits, outperforming the industry in both beer and beyond beer” categories which includes cocktails, ready to drink and spirit beverages.
Momentum in the South African unit had continued as the portfolio delivered “record high volumes and gaining share of both beer and total alcohol” consumption, according to the company’s estimates.
“Our performance in the first half of 2024 was led by our above core beer brands, which grew volumes by mid-teens driven by Corona and Stella Artois, and the continued volume growth of our core portfolio,” said AB InBev.
In terms of currency make up, the South African rand made up 3.9% of AB InBev’s revenues in the first half period under review compared to 3.6% in the same period a year ago.
Underlying profits in AB InBev for the period grew to $1.8bn in the second quarter to June from $1.4bn. On a half yearly basis, the company raised underlying profits from $2.7bn in 2023 to $3.3bn.
This was after it registered a 2.7% rise in interim revenues although total volumes for the half year slowed down by 0.7%.
Although the company’s own beer volumes were down by 1.3%, its non-beer volumes grew by 3.5%.
In the rest of Africa, excluding South Africa, AB InBev “grew beer volumes by high-teens in Nigeria” which was “cycling a soft industry” in the first half of the prior year. “In our other markets, we grew volumes in aggregate by low-single digits in the first half of 2024, driven primarily by Tanzania, Zambia and Uganda,” said the company.
Up to 70% of its revenues came through B2B digital platforms with the monthly active user base of BEES, a global B2B digital commerce platform created by AB InBev, reaching 3.8 million users in 2Q24. about $140m of revenue was generated through the company’s digital direct-to-consumer ecosystem.
Shares in AB InBev at 12.18pm were at R1088.54, 0.42% higher on the JSE.
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