The main issue facing Caribbean Brewers would be the concerns over the involvement of Gera International in Caribbean Brewers and their transfer pricing policy in regards to the exports of Gera Beer, and how it’s affecting the minority shareholders like Jason Joseph. Prior to the involvement of Gera International in the brewery, the company’s employees like Jason Joseph found their experience at the company were better. After the intervention of Gera International, employees with a large share of the company found that they had a significant reduction in their share due to Gera International owning 75% of Caribbean Brewers. Caribbean Brewers transfer pricing also greatly affects cost allocation for production costs. During production the costs that go into producing Tigua beer include a three dollar cost per case for the caps and labels. The next cost includes eight dollars per case for …show more content…
The CEO must report that the cost of productions of Gera beer is not properly being allocated between the two companies. Gera International is avoiding the eight dollar deposit for the Gera beer bottles and is also making false accusations of poor quality beers in order to justify not paying for the shipment of the beers. Furthermore, the CEO so address the issue on how the pricing policy of Gera beer from Caribbean to Gera International to the Consumer, highly benefits Gera International. Gera International even allocated the eight dollar amount to the selling price of Gera beer to further benefit their bottom line. All these activities that Gera International is performing leaves Caribbean Brewers with all costs and troubles. Since the CEO of Caribbean Brewers has a responsibility to its employees, it is their job to support employees that are being negatively impacted by these business