[Exclusive] Prosecution Conducts Search and Seizure at OB Beer Over Suspected Customs Duty Evasion Worth Hundreds of Billions

The prosecution conducted a forced investigation into OB Beer, which is suspected of evading customs duties worth hundreds of billions of won.

Yonhap News

According to the legal community on the 13th, the Tax Crime Investigation Division of the Seoul Northern District Prosecutors' Office (Chief Prosecutor Ahn Kwang-hyun) carried out a search and seizure at OB Beer's headquarters in Gangnam-gu, Seoul, the previous day. This was in response to the Korea Customs Service's investigation into OB Beer's alleged customs duty evasion and subsequent referral to the prosecution.

The prosecution is examining whether OB Beer evaded customs duties amounting to hundreds of billions of won by importing malt through illicit means.

Malt accounts for more than 90% of the raw materials imported, and liquor companies receive a 30% tax benefit on quota volumes pre-approved by the government. The tax rate on volumes beyond this quota can be as high as 269%.

The Korea Customs Service is known to have judged that OB Beer purchased quota volumes from other importers, considering this as customs duty evasion.

OB Beer is the number one beer company in South Korea, wholly owned by AB InBev, a global liquor company headquartered in Belgium.

An OB Beer official explained, "We import malt through two routes: direct import and malt importers. The Korea Customs Service is trying to additionally collect 90 billion won by raising issues with the purchases from malt importers. The malt importers paid customs duties when bringing in the malt, so this is double taxation. We have filed an appeal with the Tax Tribunal."