Transfer Pricing and Value Creation

1. S. 446Introduction

The food and beverage sector (“F&B”) plays a significant role in the economy as it employs an enormous numbers of labourers and produces indispensable products. Thus, many governments attempt to promote such businesses. In the latest years, companies in the F&B sector are finding better ways to meet growing expectations by staying on top of changing consumer demands, understanding their preferences, and employing the latest technologies that are crucial in such a competitive sector. A recent International Food Information Council Foundation’s Food & Health Survey has analysed the main trends of today’s F&B businesses and have synthetized the drivers. Firstly, mergers and acquisitions have offered new huge markets. A shift towards to foods that are more organic and healthy is taking place, and many F&B companies have added new products with healthier ingredients to their existing portfolio. Instead of developing newer products and ingredients, there is a shift to acquire companies that produce the type of food or ingredient they need. When compared to the time and resources spent on new product research and development (R&D), the cost and time to market a merger or ac...