AB InBev, the world’s largest beer producer, is facing serious allegations of misconduct – this time in South Korea. Its local subsidiary, Oriental Brewery (OB), the country’s largest brewer, is under investigation for customs fraud and large-scale tax evasion. While no convictions have yet been made, prosecutors have filed charges and the company’s CEO has been barred from leaving the country pending the outcome of the case.
The allegations center on abuse of South Korea’s Tariff Rate Quota (TRQ) system for importing malt, a key ingredient in beer. Under the TRQ, brewers can import limited quantities of malt at low or zero tariffs. Once quotas are exceeded, higher duties of up to 269% apply. Prosecutors accuse OB of systematically evading these duties by using shell companies and front entities – in some cases allegedly linked to former employees – to import malt under different names. The scheme allowed OB to continue benefiting from low tariffs far beyond the official limits.
According to Korean media reports, the scale of the alleged evasion is significant. Authorities point to at least ₩16.5 billion (approx. USD 12 million) in avoided customs duties between 2018 and 2023. On top of that, Korean Customs is demanding an additional ₩90 billion (approx. USD 66 million) in tariffs, claiming OB deliberately understated freight costs and disguised imports to further reduce its tax burden.
The case has already led to raids at OB’s Seoul headquarters and formal indictments of senior figures in the company. Prosecutors are investigating whether the fraudulent practices were systematic and company-wide rather than isolated incidents. In addition, local media have flagged broader governance concerns, including OB paying out dividends larger than its net profits – a move that raises suspicions of financial engineering to funnel money to AB InBev headquarters at the expense of Korean operations.
OB has publicly denied wrongdoing, claiming that the use of importers is “standard industry practice” and that the additional taxation amounts to double charging.
Sources
- Belgian News Agency – Belgian brewer barred from leaving South Korea due to fraud investigation: https://www.belganewsagency.eu/belgian-brewer-barred-from-leaving-south-korea-due-to-fraud-investigation
- AlphaBiz – Oriental Brewery accused of abusing TRQ malt imports: https://alphabiz.co.kr/news/print.html?newsid=102799
- Chosun Biz – Prosecutors indict OB executives over customs evasion: https://biz.chosun.com/en/en-society/2025/06/27/OAJ33N7VD5G2TARWJR2KFRERZ4/
- NewsSpace – OB disputes double taxation claims in malt import probe: https://www.newsspace.kr/news/article.html?no=6457