Sechaba, Govt in alcohol levy talks

SHARE   |   Wednesday, 03 August 2016   |   By Kabelo Adamson
Sechaba, Govt in alcohol levy talks

Johan de Kok, the Managing Director of Sechaba Holdings Limited, has said there is no major progress made thus far in the acquisition of SAB Miller by Belgian brewing giant AB Inbev, saying only that competition authorities’ applications are being considered worldwide. The proposed deal has been approved in 16 jurisdictions with Botswana Competition Authority approving the merger conditionally in May this year after satisfying itself that the proposed transaction is not likely to result in substantial lessening of competition, due to the fact that product overlap is very minimal as the products of the acquirer are distributed independently by a third party. The local competition authority approved the takeover on condition that the merged entity shall use all its endeavours to ensure that the manufacturing business of KBL is maintained instead of turning it into a distribution point for imported products; and in the event that the merged entity is compelled to change the business model into a distribution point, such intentions should be communicated to the Authority with a clear justification for their decision.

The transaction – valued at $104 billion – de Kok said would create the first truly global beer company with complementary geographic footprint with access to high-growth regions, notably Africa. The deal will create the world’s largest brewer, with a nearly 30% market share, said de Kok when briefing the media and industry analysts on Tuesday about the company financial performance for the year 2016. dek Kok said he remains confident that they will arrive at an amicable agreement with the government on the alcohol levy. De Kok held a meeting with Minister of Investment, Trade and Industry Vincent Seretse this week where the levy was top of the agenda. According to de Kok, their suggestion is that beverages with alcohol content less than 5 percent be levied at 50 percent while those with 5 percent and higher such as Black Label be levied with 55 percent. The levy currently stands at 55 percent and de Kok said the idea is to finalise proposals by end of this month. At its introduction the levy was targeted at 70 percent with the last adjustment coming into effect in December 2014. de Kok said both parties, the government and Sechaba, now feel it should be seriously looked at in terms of adjustment.

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