Gazeta Mercantil / Caderno A - Page 8 - 10/12/2004

By Patrícia Nakamura

São Paulo, December 10, 2004 - AmBev concludes installation on its production line, with investments of R $ 4 million. At least 110 beer production lines across the country already have flow meters, a system that, as determined by the IRS, should be installed by January 2005 in all beverage manufacturers whose production exceeds 5 million liters per annum. This requirement fits 25 companies, which together have 157 production lines, according to the National Union of the Beer Industry (Sindicerv), the entity that spearheaded the adoption of the system. Companhia de Bebidas das América - AmBev concluded this week the implementation of the meters in all 84 lines, 40 days before the deadline. Kaiser, Schincariol and Petrópolis have, together, around 25 systems already installed.

Flow meters aim to control the daily production of beer directly from the filling lines. The data are transmitted to the IRS through an electronic system. Manufacturers do not have access to the information sent to the Tax Authorities; however, they receive a report with the measured volume. The system consists of a conductivity meter (which identifies whether the liquid that passes through the line is beer, water or cleaning material), hardware and software for collecting and sending information and the flow meter itself. According to the superintendent of Sindicerv, Marcos Mesquita, all manufacturers must comply with the deadline determined by the Revenue.

In 2003, 8 billion liters of beer were produced in the country. The sector handles about 62 million invoices, according to AmBev's tax manager for Latin America, Ricardo Melo. Sindicerv calculates that at least the sale of 15% of the volume traded manages to escape the payment of taxes, equivalent to R $ 720 million. “The adoption of meters will make the market more competitive as evasion increases the company's profitability. In addition, it creates a psychological effect in the best style? Big Brother? among manufacturers, who are now being closely monitored ”, he said. About 33% of the price of beer is made up of taxes. The sector's turnover last year was R $ 16,5 billion.

According to Melo, about 75% of AmBev's equipment has already been tested and is approved. By the end of the year, all the company's meters must have been screened by the Institute for Technological Research (IPT) and the Federal University of Santa Catarina, entities authorized to carry out the approval. R $ 4 million was invested in the implementation of the system, developed by Orion.

Each line takes between three and four days to be approved. "We are already receiving the information collected by the IRS on our lines," said Mello.

Determination is from 2001

The adoption of the flow meter was determined by the IRS in 2001. The standards that equipment suppliers needed to comply with were determined by Inmetro and the Renato Archer Research Center, linked to the University of Campinas (Unicamp) last June. Since then, companies have until the end of January 2005 to install the meters on their production lines. Recently, devices manufactured by Siemens have received certification.

According to AmBev's manager, who is also part of the Brazilian Association of Soft Drink Manufacturers (Abir), there are already negotiations for the adoption of flow meters in the soft drink lines. “We are having conversations with the Revenue and the producers. At the end of next year, the lines must be equipped, ”he said. According to Mesquita, from Sindicerv, the water bottlers are also being targeted by the tax authorities.