A global consultancy’s report on Carlsberg India, accessed by Reuters, has claimed to have found “potential improper payments” to government officials. Reuters also cites a report by a different global consultancy, claiming to have disclosed other lapses at Carlsberg India Pvt Ltd in 2018 including child labour.
In addition, in September 2019, a Danish newspaper had claimed to have found evidence of “systematic cash payments made by senior executives in Carlsberg India to select public officials.”
The evidence of child labour cited by Reuters was detailed in an Ernst & Young internal report on an audit of two Carlsberg warehouses at a location in Jharkhand. As per the report, 24 of 41 workers there were under 21, with some as young as 16-18 years.
Carlsberg India told Reuters that the “third-party provider was terminated immediately in 2018 following the findings in the internal report.”
Carlsberg responded to Reuters saying it could not rule out breaches of its policies and code of conduct, adding that the investigations “specified that Carlsberg Group’s policies were breached in the period until 2018” and the probes identified the need for further strengthening of controls, the company said.“Carlsberg India has taken several actions as a consequence of the findings, including...dismissal of and formal warnings to employees,” it said.
As per a 2015 report, the International Labour Organisation found that over “12.9 million children in India between 7-17 years old, 5.1 per cent of the total” were in employment, “primarily working in agriculture and unpaid family work”.
This new report comes months after an India affiliate of PricewaterhouseCoopers (PwC) resigned as the company’s financial auditor. The cited reason was “divergent views among the Carlsberg India Board of Directors”. This happened as the Denmark-based company continued its dispute with the Nepal-based Khetan Group, with whom it has a joint venture in India—where Carlsberg products take up a 17 per cent share of India’s $7 billion beer market.
It comes after the Competition Commission of India reportedly found the company’s top executives, along with those of SABMiller and United Breweries, exchanged commercially sensitive information and colluded to fix beer prices; as part of an ongoing investigation. Senior CCI members had to consider the report, accessed by Reuters and drafted last March, which claimed the brewers used the All India Brewers Association as a “common platform” to decide prices collectively, with one member allegedly writing in an email, “We should avoid getting caught.”
The brewers coordinated to “manipulate the government machinery” and “were well aware that their collective approach through the association (AIBA) was violating” competition law, the 248-page CCI report said. The report concluded the cartel existed between 2007 and October 2018.
In 2018, the CCI had raided Carlsberg India's offices, along with the offices of United Breweries and Anheuser-Busch InBev, on suspicion of the existence of a beer cartel in India.
