Investments accounted for using equity method

12 Months Ended

Dec. 31, 2017

Disclosure of investments accounted for using equity method [Abstract]

Disclosure of investments accounted for using equity method [text block]

Note 16 Investments accounted for using equity method

Joint ventures and Associates

As of December 31, 2017 and 2016, the Company recorded investments qualifying as joint venture and associates.

The share value of investments in joint ventures and associates are detailed as follows:

	Percentage of participation		As of December 31, 2017		As of December 31, 2016
	%		ThCh$		ThCh$
Cervecería Austral S.A.(1)		50.00		6,126,384		5,548,458
Foods Compañía de Alimentos CCU S.A.(2)		50.00		5,792,242		5,624,391
Central Cervecera de Colombia S.A.S.(3)		50.00		50,374,322		35,449,038
Zona Franca Central Cervecera S.A.S.(3)		50.00		20,696,077		-
Total joint ventures				82,989,025		46,621,887
Bebidas Bolivianas BBO S.A.(4)		34.00		14,641,870		17,281,665
Other companies				1,639,385		501,394
Total associated				16,281,255		17,783,059
Total				99,270,280		64,404,946

The above mentioned values include goodwill generated in the acquisition of the following joint venture and associate, which are presented net of any impairment loss:

	As of December 31, 2017		As of December 31, 2016
	ThCh$		ThCh$
Cervecería Austral S.A.		1,894,770		1,894,770
Bebidas Bolivianas BBO S.A.		8,294,324		9,032,617
Total		10,189,094		10,927,387

The result accrued in joint ventures and associates are detailed as follows:

	For the years ended as of December 31,
	2017		2016		2015
	ThCh$		ThCh$		ThCh$
Cervecería Austral S.A.		952,235		754,326		247,180
Foods Compañía de Alimentos CCU S.A.		165,905		(519,536)		(1,251,392)
Central Cervecera de Colombia S.A.S.		(8,646,651)		(3,969,699)		(2,668,179)
Zona Franca Central Cervecera S.A.S.		87,583		-		-
Total joint ventures		(7,440,928)		(3,734,909)		(3,672,391)
Bebidas Bolivianas BBO S.A.		(1,459,916)		(1,805,548)		(1,557,886)
Other companies		(13,253)		(20,065)		2,142
Total associated		(1,473,169)		(1,825,613)		(1,555,744)
Total		(8,914,097)		(5,560,522)		(5,228,135)

Changes in investments in joint ventures and associates are detailed as follows:

	As of December 31, 2017		As of December 31, 2016
	ThCh$		ThCh$
Balance at the beginning of year		64,404,946		49,995,263
Business combination effect		50,462,578		25,118,232
Participation in the joint ventures and associates (loss)		(8,914,097)		(5,560,522)
Dividends received		(353,150)		(245,073)
Increase (decrease) through changes in ownership interests in subsidaries		-		(5,427,660)
Others		(6,329,997)		524,706
Total		99,270,280		64,404,946

Significant matters regarding investments accounted for using the equity method are detailed as follows:

(1) Cervecería Austral S.A.

A closed stock company that operates as a beer manufacturing facility in the southern end of Chile, which is the southernmost brewery in the world.

(2) Foods Compañía de Alimentos CCU S.A.

A closed stock company devoted to the production and marketing of food products such as like cookies and other baked goods, caramels, candy and cereal, among others.

On November 26, 2015, Foods signed a sale agreement with Empresas Carozzi S.A., under which the first sold to the second machinery, equipment and brands related to products marketed under the brands Natur and Calaf. The amount of this transaction was ThCh$ 14,931,000 and CCU recognized a net loss after taxes for an amount of ThCh$ 1,034,638, corresponding to their participation.

On December 16, 2016, Foods and subsidiary CCU Inversiones S.A., acquired 49.99999% and 0.0001%, respectively of the shares of Alimentos Nutrabien S.A. As a consequence above mentioned the only shareholders direct of that company are: (i) Food´s with 99.99999% of the share capital, and (ii) CCU investments S.A. with a 0.0001% of the share capital, respectively. The amount of this transaction was UF 545.000, equivalent to ThCh$ 14.352.706.

(3) Central Cervecera de Colombia S.A.S. and Zona Franca Central Cervecera S.A.S.

On November 10, 2014, CCU, directly and through its subsidiaries CCU Inversiones II Limitada, and Grupo Postobón have established a joint arrangements through a company named Central Cervecera de Colombia S.A.S. (the "Company"), in which CCU and Grupo Postobón participate as equal shareholders. The purpose of this Company is the beer and non-alcoholic drinks production, marketing and distribution based on malt (Products).

Subsequently, on August 16, 2017, CCU, through its subsidiary CCU Inversiones ll Limitada, acquired 50% of the shares of of a company incorporated in Colombia called Zona Franca Central Cervecera S.A.S. (ZF CC), which relates to a joint agreements and that qualifies as a joint operations, in which CCU and Grupo Postobon participate as equal shareholders. The amount of this transaction was US$ 10,204, equivalents to ThCh$ 6,432. The purpose of ZF CC is acting exclusively as industrial user of one or more free zones, providing tolling services to CCC, and this latter company will produce, market and distribute Products.

For the purposes above, previous associations involves the construction of a beer production plant, with an annual total capacity of 3,000,000 hectoliters.

The Parties will also invest in CCC and ZF CC an approximate amount of US$ 200,000,000 in equal parts, following a gradual investment plan agreed by the parties.

As of December 31, 2017 and 2016, the total amount contributed to CCC and ZF CC was US$ 144,729,978 (equivalents to ThCh$ 93,643,761) and US$ 68,078,797 (equivalents to ThCh$ 44,330,781).

(4) Bebidas Bolivianas BBO S.A.

On May 7, 2014, the Company acquired 34% of the stock rights of Bebidas Bolivianas BOO S.A. a Bolivian and a closed stock company that produces soft drinks and beers in three plants located in Santa Cruz de la Sierra and Nuestra Señora de la Paz cities. The amount of this transaction was ThCh$ 13,776,885. On December 9, 2015, the Company paid an increased of capital for an amount of US$ 2,720,000, equivalents to ThCh$ 1,921,244. On June 8, 2016 and November 17, 2016, the Company paid an increased of capital for an amount of US$ 2,221,696, equivalents to ThCh$ 1,510,420 and US$ 1,019,971, equivalents to ThCh$ 663,951, respectively.

The Company does not have any contingent liabilities related to joint ventures and associates as December 31, 2017.

As of December 31, 2017, 2016 and 2015, the significant items of the financial statements of 100% of joint ventures and associates are summarized as follows:

	Joint ventures		Associated		Joint ventures		Associated
	As of December 31, 2017				As of December 31, 2016
	ThCh$		ThCh$		ThCh$		ThCh$
Assets and Liabilities
Current assets		49,960,930		5,540,894		64,587,798		7,602,940
Non-current assets		150,837,264		26,609,731		50,994,744		30,504,073
Current liabilities		35,339,239		4,444,262		23,043,784		5,886,879
Non-current liabilities		1,994,220		9,037,112		2,350,385		7,789,367

	Joint ventures		Associated		Joint ventures		Associated		Joint ventures		Associated
	For the years ended as of December 31,
	2017				2016				2015
	ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Income Statement (Summarized)
Net sales		57,417,288		19,760,918		63,926,397		19,733,853		59,187,508		18,310,272
Operating result		(18,606,383)		(4,086,973)		(11,913,526)		(4,159,093)		(6,796,020)		(4,039,249)
Net income for year		(14,352,789)		(4,462,733)		(7,287,727)		(4,712,596)		(6,803,143)		(4,573,734)
Other comprehensive income		(27,052,016)		(5,761,515)		(3,451,487)		(7,965,214)		(2,494,511)		-
Depreciation and amortization		(2,618,567)		(2,818,923)		(2,104,820)		(2,698,849)		(1,998,935)		(534,485)