Regulatory risks

Tax

Heineken and its operating companies are subject to a variety of local excise and other tax regulations. Group Fiscal Affairs is in the process of structuring tax risk management through the roll-out of a Tax Control Framework. Beer excise duties could have strong impact on the financial results. In principle, Heineken’s sales prices are adjusted to reflect changes in the rate of excise duty, but increased rates may have a negative impact on sales volume.

Litigation

Due to increasing legislation there is an increased possibility of non-compliance. Additionally, more supervision by regulators and the growing claim culture may potentially increase the impact of non-compliance, both financially and on the reputation of the Company. Every half year all majority-owned companies formally report outstanding claims and litigations against the Company in excess of €1 million to Group Legal Affairs, including an assessment of the amounts to be provided for.

There may be current risks not having a significant impact on the business but which could – in a later stage – develop a material impact on the Company’s business. The Company’s risk management systems are focused on timely discovery of such risks.