Danish brewing giant Carlsberg played a central role in widespread tax fraud that went on for several years in the South East Asian nation of Malaysia. The fraud was allegedly orchestrated by criminal middlemen and continued despite the brewer's knowledge of the illegal activities.
This appears from internal documents to which Berlingske has had access and the contents of which have also been confirmed by several sources independently of each other.
Carlsberg's head office in Denmark was notified of the matter in August 2019 by an internal whistleblower who was previously a centrally placed member of staff.
In raising the alert, the former employee described how large quantities of Carlsberg beer were exempted from tax duties due to being intended — on paper — for sale in the Eastern part of Malaysia. But the beer never reached East Malaysia and instead was channelled on to the West Malaysian market and sold illegally tax-free.
This robbed the Malaysian state coffers of tax receipts, and the whistleblower claimed that both local management in Malaysia and the top management in Copenhagen were aware of the fraud which in tax terminology is referred to as »U-turn« or »flowback«.
»The method (...) shows that management knowingly defrauded the Malaysian State duties,« the whistleblower wrote.
International tax experts have told Berlingske that the method described involves illegal tax fraud.
Internal emails show that Carlsberg's local subsidiary was aware that a large quantity of the brewer's beer was being sold without paying the statutory tax duties.
Documents also show that Graham Fewkes, who is now a member of Carlsberg's group management with responsibility for the Asia region, had knowledge of the illegal method.
According to Berlingske's information, the fraud happened from 2010 to at least 2014. It remains unclear if the illegal activity continued after that.
In a written response, Carlsberg's Media Director Kasper Elbjørn confirms that Carlsberg has long »been aware of serious problems involving the smuggling of beer and tax avoidance in Malaysia«, but states that, following an escalation of the problem in 2013, the brewer took a number of steps to resolve the issue.
The press spokesman also stresses that the tax avoidance took place at the middleman level and that Carlsberg has no interest whatsoever in undertaking such illegalities.
»It is without a doubt a very serious matter both for us as a brewer and for the Malaysian government,« Kasper Elbjørn writes in an e-mail.
Berlingske has tried, unsuccessfully, to get a comment from the Malaysian customs authorities.
This case is only the latest in a string of allegations about illegal activities in Carlsberg's Asian businesses. In the autumn of 2019, Berlingske revealed how Carlsberg's Indian subsidiary systematically bribed local government officials in order to obtain the required permits to operate one of the group's largest breweries in the country.
Read a longer version of the story (in Danish) here.
Read an English version of the previous case of alleged bribery here.