Castel Malawi risk closure: MRA gets garnishee order for brewer’s  bank accounts

Castel Malawi Limited, formerly Carlsberg Malawi Limited, is at risk of closure due to continued decline in sales volume, turnover and heavy excise tax rate.

Castel Malawi Limited faces closure

This was announced by Castel Malawi Managing Director Herve Milhade in a memo on Monday, June 17 to its members of staff.

Milhade said over the past few years, Castel Malawi has struggled to maintain business profitability due to mostly unfair conditions set by Malawi Revenue Authority (MRA), who have since taken over the company’s accounts.

“In 2013, the Malawi Revenue Authority confirmed calculation of excise tax for alcoholic beverages be based on 90% of production cost,” Milhade said in the memo.

In 2013, the tax collector confirmed the calculation of excise tax based on production cost.

“In September 2018, Malawi Revenue Authority advised the Company to start calculating excise tax based on ex-factory price (production cost + margin). At the rate of 90% this will adversely affect the performance, cash flow and survival of the company.

“As recently as Thursday, 13th June, 2019, I met with top MRA officials, Mr. Tom Gray Malaya, the MRA Commissioner General and Mrs. Nellie Jimmu — Commissioner of Domestic Taxes. However, these efforts have failed and the MRA has issued a final distraint notice against the Company.

“Today, Monday 17the June, 2019, the Malawi Revenue Authority has garnished Castel Malawi Ltd accounts. This action by MRA mean that Castel Malawi Ltd is at risk of closure and the withdrawal of Castel Group from the country due to unrealistic and unaffordable excise calculations.”

However, Milhade assures his employees that together with his management team, he will continue to put every effort to rectify the current situation to sustain operations and their commitment to employees, customers, consumers and the general public.

“I will dedicate my time to turn things around because this fight is not only for Castel Malawi Ltd but for all Malawians,” he said.

However, a source within the company confided with this Nyasa Times that the MD indicated at a staff union meeting they had that the owners are considering leaving the country opting for Zambia, citing unfavorable economic environment and unstable political environment.

The source says the government milks the company by demanding payment on top of the excessive taxes it is being charged with.

“There is a crisis meeting in the boardroom Confederation by the management team and staff union to discuss the way forward,” said the source.

According to a document sent to this publication by the company’s Corporate Communications and Digital Manager Titha Mbilizi, the tax MRA is charging is exorbitant to the company.

”These actions by MRA mean that Castel Malawi Ltd is at risk of closure and the withdrawal of Castel Group from the country due to unrealistic and unaffordable excise calculations,” she said.

Mbilidzi adds “The position the Company finds itself in, means the potential end of a beverage legacy for the country and this means a Malawi without brands with such strong national heritage such as SOBO Squash, Malawi Gin, Premier Brandy; A Malawi without Carlsberg Beers, A Malawi without The Coca-Cola Franchise, A Malawi without Castel Beer.”

The company further sponsors football from a grass root level through its Copa Coca-Cola trophy which targets secondary schools and professional football through the Calsberg Cup and employs about one thousand, eight hundred eighty-four workers.

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Kingmfumu
Guest
Kingmfumu

MRA is a Government agency responsible for collecting taxes. MRA does set Tax Rates. Tax Rates are set by the Ministry of Finance.

Truth Pains
Guest

DPP is forcing MRA to milk business to bail out Jane Ansar that’s why these managers are commiting fraud.

Charlie Hebdo
Guest
Charlie Hebdo

While the majority of Malawians are at risk of losing their jobs, Muthalika and his cronies are busy sharing public positions. They have no motivation to ensure companies like Castel or Peermont stay operational. I hope Castel employees who voted for APM get employed in the public service should the company close.

Concerned citizen
Guest

MRA is an Authority which just follows the set law. I have issue and problems with the Ministry of Finance. It is either they have no idea what the corporate world requires to thrive and grow, or they are intentionally sabotaging the economy of our beloved country. How do you explain all the closing down of the once productive industries such as Lever Brother, BAT, PEW. I will not even mention the subsidiaries of Press. Ministry of Finance, immediately review our tax regimes for local industry and make it pro local Malawi production. Do not punish local industry for trying… Read more »

Akubawa
Guest
Akubawa

Problem with multinational companies like Castel is that they always want to lower the tax bills. Carlsberg was in Malawi for 50 years, paid their tax quietly because it was part owned by Press Corporation

Fellow Malawians, be informed that the aim of excise tax is mainly to discourage consumption of the goods/service and not necessarily to collect money for government.

#NotMyPresident
Guest
#NotMyPresident

Inunso ngabodza inu. Apa if the government do no want people to consume beer as you claim, why not just barn it. Why not just barn beer drinking and tobacco smoking.

Sikusinja
Guest
Sikusinja

Meaning government wants to discourage drinking? But don’t they collect money in the process. Are you sure they haven’t calculated how much more they can get. Why not keep the formula constant.

Njayo
Guest
Njayo

Remember it is a Malawi Revenue AUTHORITY and not a service as depicted in other jurisdiction

Smart Aunt Sally
Guest

Pay your taxes. Drive a Nissan Tiida. Pay your taxes. Stay in a two bedroom house. Pay your taxes. Go on holiday to camp- site near chileka. Pay your taxes……….or just use tippex.

Steve
Guest
Steve

We have the names of the criminals from MRA !

K-money
Guest
K-money

This Castel M.D. is meeting wrong people, these tariffs are set by some Revenue based Economists at Ministry of Finance, revenue dept, and these guys all they care about is revenue, MRA is not at fault here , they are only enforcing rates as per government policies sheet. This guy needs to take his fight to treasury or Ministry of finance. Or else you castel lovers will soon be drinking Frozy.

Njolo mpilu
Guest
Njolo mpilu

One of the retired boss told me in his office when i went in with my complaont at these offices saying the govt wants 100 million from mra thus all these high taxes ukamakenga katundu now the junior staff kulowaposo eish. A country with no standards aliyese kumangochaja mmene pakhomo pashotera. No wonder even ma polisi ,road traffic kunyumba kukdutsa galu wakuda amamgovala uniform kukamaimitsa magalimoto with mare stupid milandu if at all. Laye camera kukaima pamwala ,ngati akwele mu ntengo.
5 stops within 5 miles. What a FUCK