Solidarity tax: FMCG groups report thin profits in Romania, but big ones globally
FMCG multinational groups report in Romania profit margins up to 15-20 times lower than globally, Ziarul Financiar (ZF) daily concluded upon surveying the bottom lines of such groups.
The survey doesn't have purely academic purposes, but it can be put in the context of the public debate related to the global corporate taxation or even related to the "solidarity" taxation pondered by the Social Democrats in Romania as a short-term fix until a global solution is agreed upon.
Out of the 15 groups surveyed by ZF, 11 report much lower profit margins in Romania. The only exceptions are Ursus brewery (part of the Japanese group Asahi) and Heineken brewery - the two largest players in the beer market, and Albalact (part of Lactalis) and FrieslandCampina - some of the largest players in the dairy industry.
For comparison, the Mondelez group on the confectionery market, which has in its portfolio brands such as Milka and Oreo, has a local margin of 0.8% and a global margin of 13.5%.
PepsiCo and P&G are in similar situations. P&G, for example (the company operates a couple of plants in Romania), reports a profit margin of 1.7% in Romania, while globally, its profit margin of 518%. Unilever has a profit margin of 1.2% in Romania and a global margin of 12%.
Recently, 136 countries in the world, including Romania, have signed a historic agreement that provides for the imposition of a minimum corporate tax of 15%, which would discourage the transfer pricing practices.
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