Sunday, 17 August 2008

Embargo Implications for A-B InBev?

As business becomes more global, the lines between domestic and foreign businesses grow increasingly blurred. In the case of the embargo on Cuba, which restricts American businesses from doing business in the communist island, this can mean hefty fines:
Minxia, a Maryland-based subsidiary of China’s MinMetals Corporation, $1.2m for dealing in Cuban metals. Gate Gourmet, a Swiss-American group, was ordered to pay $600,000 because it supplies in-flight meals to Cuba’s national airline...
This may spell trouble for newly formed A-B InBev:
InBev, a Belgian-Brazilian brewer that recently bought America’s biggest beer maker, Anheuser-Busch, for $52 billion, has a joint-venture with Cuba’s government which claims 40% of the island’s beer market. As a director of a European company with a big investment on the island puts it, the best strategy is to “try to stay under the radar and make damned sure you are here when the United States’ government finally sees sense.”
Good luck staying under the radar after being quoted in the Economist.

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