Carlsberg Group Economic Contribution Report
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Economic Contribution Report 1 Carlsberg Group Economic Contribution Report 2015 Economic Contribution Report 2 CONTENTS 03 Foreword by our CEO 04 Company profile 05 Employment generated 06 Total value added 07 Economic value generated 08 Total direct and indirect tax contribution APPENDICES 10 Our tax policy 11 Tax charged in the financial statements 12 Independent assurance report 13 Tax contribution principles Economic Contribution Report 3 Foreword by our CEO This report provides insights into the full economic contribution of In this report, we provide information on why we decided to produce this report. the Carlsberg Group. our economic contribution to the societies We hope the report sheds further light on in which we operate. our total economic contribution, including our employment and growth contribution as The Carlsberg Group has brewery well as our tax policy and tax contribution. operations in more than 40 countries in Western Europe, Eastern Europe and The data provided on our wider economic Asia. In addition, we are present in more contribution are calculated by Regioplan based than 100 countries worldwide through on a well-recognised methodology. KPMG licence and export agreements. In all has issued assurance on selected information these markets, we create jobs, growth based on existing accounting regulations and and a range of government revenues. our own reporting, which is constantly under review to ensure that it reflects best practice OUR ECONOMIC CONTRIBUTION and regulatory developments. In 2015, the Group employed around 45,000 employees directly. An additional THE CARLSBERG FOUNDATION 410,000 jobs were created in related This report looks exclusively at the direct industries such as agriculture, hospitality and indirect economic contribution of the and retail as a consequence of the produc- Carlsberg Group. tion and sale of our products. Altogether, the production and sale of the Carlsberg In addition, our major shareholder, the Group’s products generated almost DKK Carlsberg Foundation, donated more than 105bn in total government revenues directly DKK 300m to art, culture and basic research and through related industries. within the fields of natural science, the humanities and social science in 2015. We will continue to develop our business in a way that benefits the Carlsberg Group FEEDBACK as well as the societies and economies upon We hope that the information provided will which we depend for future growth. be helpful to stakeholders who wish to gain an enhanced understanding of the wider We recognise that there is a growing interest economic contribution of the Carlsberg in the economic contribution of international Group, and we welcome feedback on the Cees ’t Hart companies, which is part of the reason report to help us improve our disclosure. President & CEO, Carlsberg Group Economic Contribution Report 4 Company profile The Carlsberg Group, headquartered in Copenhagen, Denmark, is a global brewer with a presence in more than 150 markets around the world. The core of our business is beer, accounting of our markets we hold strong positions. for approx. 85% of our total beverage We service the rest of the world through volume. We have around 140 brands in our export or licence agreements. global portfolio. The Carlsberg Group employs around PORTFOLIO AND GEOGRAPHY 45,000 people directly and, taking into Three fourths of our beer volumes are account jobs generated indirectly in made up of our local power brands, such related industries such as agriculture and as Kronenbourg in France, Kasztelan in hospitality, the Group generates jobs for Poland, Baltika in Russia, Beerlao in Laos 455,000 people in total. and Chongqing in China. Alongside these, we have a strong portfolio of international The Carlsberg Group provides significant employment in premium brands ‒ Carlsberg, Tuborg, 1664 other industries, such as the and Grimbergen ‒ that deliver approx. 25% BEER VOLUMES OPERATING hospitality sector. of our total beer volumes. PROFIT Western Europe Eastern Europe In addition to beer, in selected markets Asia we have a portfolio of soft drinks, water, cider and other beverages. Although still 31% 28% small on a global scale, cider is a rapidly 42% growing category in our beverage portfolio. Somersby, our international cider brand, 53% is the world’s fastest growing international cider brand and available in 51 markets around the world. 19% Our business is centred in Western Europe, 27% Eastern Europe and Asia, and in the majority Economic Contribution Report 5 1 Carlsberg Group employee Employment creates an additional 9 generated jobs in related industries. In total, 455,000 jobs are created by the DIRECT EMPLOYMENT Group, an additional nine jobs are created Carlsberg Group. In 2015, the Carlsberg Group directly in related industries. employed around 45,000 people1. The majority of our employees work at our COMMUNITY ENGAGEMENT production sites, which are often located J.C. Jacobsen, the founder of Carlsberg, in less populated local areas. We also built his company on the passionate and Distribution of employment employ a highly skilled workforce in dedicated belief that the prosperity of areas such as sales & marketing, finance, Carlsberg was conditional on engaging with production, procurement and logistics. and giving back to society. That heritage guides our values and actions today, and TOTAL EMPLOYMENT GENERATED the legacy is kept alive through hundreds In addition to the employees directly of local community engagement activities employed by the Carlsberg Group, the across the markets in which we operate Group also generates employment in majority-owned companies. related industries in connection with the production and sale of our products. The employees of the Carlsberg Group all over the world make great efforts to The indirect contribution to employment is integrate our CSR policies and initiatives Retail 15% Suppliers incl. generated through suppliers in areas such as into their local communities. agriculture, packaging and logistics as well agriculture 33% as induced employment in the hospitality In 2015, our majority-owned companies and retail sectors. It is estimated that the invested DKK 38m within their local total indirect and induced employment communities, including in-kind donations created by the Carlsberg Group in 2015 such as free products to support charity amounted to approx. 410,000 employees. events, direct financial contributions and cause-related marketing activities. Including the people directly employed by the Carlsberg Group, more than 455,000 Across the Group, we had 816 community people are employed due to the production engagement activities in 2015. 6395 and sale of the Carlsberg Group’s products. employees spend more than 25,000 For every person employed by the Carlsberg hours on volunteering projects supporting local communities (cf. Carlsberg Group Hospitality 42% Carlsberg Group 10% 1 Year-end headcount in majority-owned businesses. Sustainability Report 2015). Economic Contribution Report 6 Total value added Significant value is generated by the production and consumption of the Carlsberg Group’s products In general terms, value added is the TOTAL VALUE ADDED (DKK) difference between the market value of the final product and the purchasing value of the goods and services acquired for its production. 78.2bn Calculated by Regioplan using a well- recognised methodology, the value added by the production and sale of the Carlsberg Group’s products in 2015 totalled more 15% than DKK 78bn in our markets. Our production and sales facilities, as well as suppliers, hospitality and retail outlets, add value to the final product that is sold to 42% consumers all over the world. The Carlsberg Group has a Value added pays companies’ tax liabilities diverse portfolio of markets in and employees’ wages, and rewards lenders Asia and the region accounts for and entrepreneurs for their investments. 31% of Group beer volumes. For the governments in the countries in which we operate, value added is the source 33% of their VAT revenues. Retail Hospitality Suppliers (including agriculture) 10% Carlsberg Economic Contribution Report 7 Economic contribution The economic value generated includes ECONOMIC VALUE GENERATED (DKK) gross revenue, other income, financial income and income included in special items. Our contribution is distributed among our stakeholders – as operating costs to our 92.6bn suppliers, as wages etc. to our employees, as financial expenses to our providers of capital and as taxes to governments. The economic value retained is the profit used to finance dividends for our shareholders and the future growth of our business. In 2015, directly generated economic value in the countries in which we operate totalled Operating costs DKK 92.6bn. The contributions in the six 49.4% DKK 45.8bn main areas are shown in the figure. Special items TAXES BORNE 9.5% DKK 8.8bn The Carlsberg Group’s taxes borne in 2015 amounted to DKK 28.9bn, or almost one Employee wages third of the economic value generated. 10.5% DKK 9.7bn The vast majority of our taxes borne are indirect taxes incurred through excise Providers of capital duties (approx. 89%), while the remaining 2.2% DKK 2.0bn 11% is incurred through direct taxes such as environmental tax, corporate income tax and social security contributions for Taxes borne incl. excise duties employees. 31.2% DKK 28.9bn Taxes borne are further described on the following page. Economic value retained -2.8% DKK -2.6bn Economic Contribution Report 8 Total direct and indirect tax contribution DIRECT TAX CONTRIBUTION TOTAL TAX CONTRIBUTION TOTAL GOVERNMENT In 2015, the Carlsberg Group’s total (DKK billion) REVENUES GENERATED (DKK) tax contribution, comprising both taxes 50 borne and taxes collected, amounted to DKK 38.6bn. 104.7bn The vast majority of our taxes borne are 8.8 38.6 indirect taxes incurred through excise 40 duties. The remaining taxes borne are direct taxes such as corporate income tax, 7.1 social security taxes and other taxes like 29.81 environmental tax etc. 30 1.7 1.4 2.1 In addition to the taxes borne, we also 0.7 collect taxes on behalf of governments, for example employee taxes, VAT and 63% 20 other taxes.