Brewers in hot water over junta tax links

YANGON, 20 April 2023: Brewery giants Heineken, Carlsberg and ThaiBev are allegedly paying tens of millions in tax to the Myanmar military junta, according to a Justice For Myanmar press statement based on an investigation of tax filings released by Distributed Denial of Secrets*.

The foreign companies stand accused of partnering with the family of the deceased Thein Tun, who controlled Myanma Golden Star Group with his son, Thant Zin Tun. Myanma Golden Star Group produces beer with Carlsberg and soft drinks with a subsidiary of Lotte Corporation.

Thein Tun’s daughter, Mar Mar Tun and son-in-law, Aung Moe Kyaw, are the local partners of Heineken and Thai Beverage (ThaiBev). ThaiBev controls the Grand Royal Group.

Justice for Myanmar says an analysis of available tax filings from October to December 2021 indicates that Heineken, Carlsberg and ThaiBev subsidiaries paid MMK49.9 billion in Specific Goods Tax (SGT) alone to the military junta, equivalent to USD27.6 million based on average exchange rates from the Central Bank of Myanmar.

SGT is a tax on the production and import of alcohol and other products applied to beer at a rate of 60% and a sliding scale for spirits, depending on the price level.

ThaiBev, Heineken and Carlsberg companies allegedly pay commercial tax and income tax to the junta, totalling MMK12.6 billion in the period, equivalent to USD7 million.

Justice for Myanmar alleges that spread across a year, ThaiBev, Heineken and Carlsberg companies in Myanmar could be paying as much as MMK250 billion or USD155 million in taxes to the junta.

Lotte, which is not subject to SGT, pays smaller amounts of tax and is also responsible for lease payments to the Myanmar Army as part of its hotel subsidiary’s investment in hotel development with POSCO International.

Justice For Myanmar calls on ThaiBev, Heineken, Carlsberg and Lotte to follow the guidance of the National Unity Government and their international human rights responsibilities and end payments to the military junta.

Justice For Myanmar spokesperson Yadanar Maung says: “Heineken, Carlsberg and ThaiBev are paying the equivalent of tens of millions of dollars in taxes annually to the Myanmar military junta, which is a terrorist organisation that has been committing war crimes and crimes against humanity against the people of Myanmar with total impunity.”

On 11 April, the junta launched an indiscriminate aerial attack against people gathered at an event in Pazigyi village, Sagaing, killing at least 168 people, weeks after the UN Human Rights Council passed a resolution that called on the Myanmar military to cease all air strikes immediately.

When asked about its tax payments to the junta and its human rights due diligence, Heineken responded, “Our main priority in Myanmar continues to be the safety and livelihoods of our people, their families and those connected to our business. By maintaining our presence, we are living up to our long-term commitment to our employees and the communities related to our business.”

“We have done our due diligence and are assured that our Myanmar business has no ties with the military. However, as responsible businesses under local and international standards, we must pay taxes in all markets we operate. Fulfilling our obligations in Myanmar does not represent our support to the government in question.”

Carlsberg responded, “As a company, we are subject to local laws in all the markets we operate in. This means that, like any other company, we must pay taxes and duties, whether in Myanmar, Denmark or any other market.”

“Our human rights programme follows the UN Guiding Principles on Business and Human Rights (UNGP). This ongoing work includes concrete efforts to prevent, address and remedy human rights abuses connected to our value chain.”

“We have a human rights policy with global applicability, and we conduct human rights due diligence to identify the areas of human rights that could be adversely impacted by our value chain, which is a necessary step to be able to identify adequate measures to address such impacts.” 

“In Myanmar, we started conducting a series of enhanced human rights due diligence activities in 2022 to understand the operational environment better. This work is being done in conjunction with external parties and involves input from various stakeholders with expertise in human rights and the local environment. The outcome of this process will be communicated in our global ESG report when finalised.”

ThaiBev and Lotte did not respond to questions from Justice For Myanmar.

*Distributed Denial of Secrets is a journalist 501(c)(3) non-profit devoted to enabling free data transmission in the public interest.

(Source: Justice for Myanmar)