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Some of the world’s largest companies have claimed millions of dollars in Covid-19 wage subsidies for their New Zealand operations, and some have paid huge dividends to investors.
The government subsidy scheme was designed to provide cash to employers who experienced a drop in income due to Covid-19, so that they could continue to pay staff salaries. It has paid $ 14 billion and at its peak it supported 1.8 million jobs.
Last week, the NZ Super Fund said that companies that accepted the Covid-19 wage subsidy should review their finances and consider whether it was appropriate to withhold money from New Zealanders.
As of the week ending October 9, nearly $ 500 million was refunded in 16,293 refunds.
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Some companies listed on the New Zealand stock exchange, such as Briscoe Group, retiree village operator Summerset, and retailer Hallenstein Glasson Holdings, have been singled out for claiming the subsidy and paying large dividends to investors after their Business fared better than expected during the pandemic.
On Friday, after mounting public pressure to act within the spirit of the scheme, Briscoe Group said it would pay its $ 11.5 million grant.
The wage subsidy record shows that some of the world’s largest companies claimed millions in wage subsidies.
John Anthony / Stuff
Coca-Cola Amatil was able to continue operating as an essential service during the shutdown. He claimed $ 7 million in wage subsidies.
Coca-Cola Amatil (NZ), the local bottler for The Coca-Cola Company, claimed $ 7.2 million in wage subsidies for its New Zealand business. It was considered an essential service, meaning it was able to continue operating during the shutdown, but many of its customers were unable to.
The owner of the New Zealand business, the Australian listed company Coca-Cola Amatil, recently declared a dividend of about A $ 65 million (NZ $ 70 million) paid to investors at 9 cents. per share.
During the six months through June, the company’s business in New Zealand posted a “resilient performance” with earnings and revenue falling just 4 and 5 percent respectively, it said.
A spokesperson said that Coca-Cola Amatil NZ had nearly 1,200 employees in New Zealand and that their priority had been to keep them all fully employed and paid, which they had been able to do.
Revenues fell more than 30 percent in April compared to the same period last year, he said.
“When the blockade was imposed we could not know how severe or long its effects would be.”
Given the impact on his business and “the still lingering Covid-19 threat,” he was not planning to repay the subsidy at this stage, but was continuing to assess the situation, he said.
David White / Stuff
McDonald’s fast food chain was closed during alert level 4, but was able to continue operating since late April when alert level 3 entered.
McDonald’s Restaurants (New Zealand), which operates on a franchise model and is a wholly owned subsidiary of McDonald’s Corp, claimed $ 7 million for its 1,185 staff.
McDonald’s restaurants were closed during Level 4, but were allowed to open when the country moved to Level 3 on April 27.
McDonald’s New Zealand spokesman Simon Kenny said it had to close all 170 New Zealand restaurants below level 4.
“The impact of Covid-19 on our restaurants has been significant in terms of lost sales and the wage subsidy was used as planned, helping to keep our staff and restaurants operating during the closure and the rest of the year “, Kenny said.
McDonald’s Corp will have paid around US $ 2.8 billion (NZ $ 4.08 billion) in dividends to shareholders between June 15 and December 15.
AP
Elon Musk’s company, Tesla, claimed a wage subsidy.
Electric car company Tesla, which opened its first showroom in New Zealand in 2018, claimed $ 169,000 in wage subsidies for 24 employees.
CEO and 20 percent owner Elon Musk is the world’s third-richest person with an estimated net worth of $ 85 billion, according to fortune.com.
He is also against government handouts designed to reduce the economic carnage resulting from the pandemic.
On July 25, he said another stimulus package from the US government was not in the best interests of the people, following news of a coronavirus relief package proposed by Senate Republicans.
Later, he tweeted that any stimulus should only be direct payments to customers.
Tesla did not respond to Stuff request for comments.
Dean Kozanic / Stuff
Asahi Beverages (NZ), producer of Asahi beer, has no plans to repay $ 2.2 million it claimed in wage subsidies.
Japanese beverage company Asahi Beverages (NZ) (formerly Independent Liquor) claimed around $ 2.2 million in Covid-19 wage subsidies for its business in New Zealand.
It was considered an essential business and was operated during closure, but many of its customers, such as restaurants and bottle shops, were forced to close.
A company spokesperson said its revenue fell by more than 30 percent.
“The impact on sales was significant because Asahi products, such as RTDs, are mainly sold only through traditional liquor stores.”
He was able to continue selling beer, wine and cider through supermarkets, but they were a smaller sales channel for his liquor portfolio, he said.
He had not considered reimbursing the wage subsidy, he said.
Rival Lion, owned by Japanese brewer Kirin, made the decision early on not to claim, regardless of the impact of Covid-19, a spokeswoman said.
“As it turned out, revenue has been sustained, but our profits have suffered, primarily due to Covid’s considerable impact on the local market and liquor retail stores.”
John Selkirk / Things
DB is owned by the international brewing company Heineken. He claimed a salary subsidy but quickly returned it.
Heineken-owned alcohol producer DB claimed $ 3.3 million in wage subsidies but reimbursed the full amount after realizing it was the right thing to do, a spokeswoman said.
“When New Zealand entered the level 4 lockdown in March we were fortunate to be able to continue brewing, however, two of our three revenue channels were closed and we anticipate a severe impact on our business, so we requested and received the Government subsidized wages, “said the spokeswoman.
“We quickly realized that the right thing to do was return the money.”
It has been able to navigate 2020 by adapting ways of working and implementing a strong focus on costs, he said.
The Walt Disney Company (New Zealand), owned by one of the world’s largest and most powerful companies, Disney Enterprises Inc, claimed $ 51,550 for 11 employees.
Stuff He approached the company to find out what his business in New Zealand consisted of and how it was affected by Covid-19, but got no response.
Last year, Disney made a profit of $ 11.6 billion on revenue of nearly $ 70 billion.
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Adidas has suspended dividends and is unlikely to pay them again before mid-2021.
Sportswear company Adidas claimed $ 400,000 in wage subsidies for 69 employees.
Did not respond to Stuff questions before the deadline.
Fisher Funds, a provider of managed funds from New Zealand, invests in Adidas. Its senior portfolio manager, Ashley Gardyne, said Adidas was an example of a great company “right in the middle of the storm.”
“It is a large company that was much more affected by Covid than by the global financial crisis.”
When stores were forced to close, revenues fell, excess stocks were left and staff had to keep paying, he said.
“For them, at the time and it’s still ongoing, it’s pretty drastic.”
Adidas this year posted its biggest quarterly loss in history, he said.
“They lost a lot of money and had to borrow a lot to get through that period.”
The company’s e-commerce channels had been strong, but had not been enough to offset the impact of Covid-19, he said.
For years to come, they may do better than they would have if it hadn’t been for the shift toward online sales, he said.
“But that hasn’t really helped them in the last few quarters to pay staff and cover bank debt.”
Its business in New Zealand would consist of its brick and mortar stores, but most of the business would be wholesaling shoes to local sporting goods stores in addition to its e-commerce business, he said.
Adidas had suspended both its dividend and stock buyback program as a result of Covid-19, it said.
New lines of credit from banks mean that the dividend is unlikely to restart before the middle of next year, he said.
If a company had accepted a wage subsidy and did not end up being materially affected by Covid-19, then it should return the wage subsidy, he said.
Other international companies claiming wage subsidies include South Korean electronics company Samsung ($ 682,000), China Construction New Zealand ($ 373,000), Estee Lauder ($ 879,000), Toyota New Zealand ($ 2.3 million) and Mitsubishi Motors New Zealand. ($ 456,000).
– Stuff claimed $ 6.2 million in wage subsidies for 907 employees.
