2 june 2020

Central Asia news

Uzbekistan: Court declined tax appeal by Carlsberg Uzbekistan

18.10.2012 17:58 msk


The Supreme Commercial Court of Uzbekistan has rejected an appeal by Carlsberg Uzbekistan (UzCarslberg) against the complaints and financial sanctions imposed by the tax authorities, RIA Novosti reports with a link to the court’s representative.

“The decision of the lower courts has been remained valid, the court has not heard any new arguments in favour of the company”, a source said.

According to the source, Carlsberg Uzbekistan, a 100% subsidiary of Carlsberg Group, was issued legal action for evading taxes and has undergone financial sanctions for hiding income from unregistered production, amounting to around 9 billion soms ($4.6 million according to the official exchange rate).

In particular, according to the tax authorities, the company produced 16.6 hectolitres of beer in unregistered produce and sold them illegally. The tax authorities have also ordered Carlsberg Uzbekistan to pay back tax on profits and have ordered a series of subtractions to go into the budget. In August, the Tashkent city commercial court supported the demands of the tax authorities and declined the appeal subsequently presented by Carlsberg Uzbekistan.

Reports about Carlsberg Uzbekistan halting its production appeared in the media on 13 June 2012.The company began having serious difficulties a year ago: Carlsberg’s main assets were devalued, which only happens when a company has hardly any opportunity for development. The reasons given for the devaluation were market difficulties, weak (bad) reporting, i.e. bad indicators, and bad profit forecasts.

From mid-2011 the company has undergone a comprehensive financial-commercial, with participation from the prosecutor’s office of Uzbekistan. The results of this investigation have not been publicised.

In March 2012 the company stopped bottling its produce and sent its staff on unpaid leave until September, with managers and specialists remaining in place to maintain the technical equipment. Beer production has not re-started at the company.

It was previously reported that Carlsberg Group is in negotiations with a number of investors about the sale of its Uzbek subsidiary. The negotiations process is in its beginning stages.

The Carlsberg Group bought out its Uzbek partner Sarbast Plus in July 2009 thus increasing its stake to 100%. As of today, the total volume of investment in the project is over $100 million.

UzCarlsberg produced seven brands of beer: four brands of Sarbast in the premium segment, the Tuborg Green brand, as well as three Baltika brands. As well as beer brands the company produced unalcoholic kvass.

Fergana international information agency. Translated by Sophia Matveeva