Contingencies and Commitments

12 Months Ended

Dec. 31, 2019

Disclosure of commitments and contingent liabilities [Abstract]

Disclosure of commitments and contingent liabilities [text block]

Note 34

Contingencies and Commitments

Operating lease agreements

The total amount of the Company’s obligations with third parties relating to lease operating and services agreements that cannot be terminated is detailed as follows:

Lease operating and services agreements not to be terminated	As of December 31, 2019	As of December 31, 2018
	ThCh$	ThCh$
Within 1 year	56,054,644	56,311,446
Between 1 and 5 years	54,935,377	59,404,285
Over 5 years	11,824,929	22,661,389
Total (1)	122,814,950	138,377,120

(1)

In 2019 under this disclosure there are commitments related to service contracts, short-term and low-value lease agreements.

Purchase and supply agreements

The total amount of the Company’s obligations to third parties relating to purchase and supply agreements as of

December 31, 2019

is detailed as follows:

Purchase and supply agreements	Purchase and supply agreements	Purchase and contract related to wine and grape
Purchase and supply agreements	ThCh$	ThCh$
Within 1 year	238,823,373	15,242,253
Between 1 and 5 years	1,144,214,818	11,727,826
Over 5 years	75,941,390	-
Total	1,458,979,581	26,970,079

Capital investment commitments

As of

December 31, 2019

, the Company had capital investment commitments related to Property, Plant and Equipment and Intangibles (software) for approximately ThCh$

44,678,091

Litigation

The following are the most significant proceedings faced by the Company and its subsidiaries in Chile, including all those

present a possible risk of occurrence and causes whose committed amounts, individually, are more than ThCh$ 25,000

And US$ 15,000 for cases of foreign subsidiaries

Those losses contingencies for which an estimate cannot be made have been also considered.

Trials and claim

Subsidiary	Court	Description	Status	Estimated accrued loss contingency
Comercial CCU S.A.	Court of Appeal.	Debt payment lawsuit.	Opposition to execution is pending.	ThCh$ 42,126
Embotelladoras Chilenas Unidas S.A.	Court of Appeal.	Debt payment lawsuit.	Opposition to execution is pending.	ThCh$ 101,377
Compañía Industrial Cervecera S.A. (CICSA)	Labor Court.	Labor trial.	Evidentiary stage.	US$ 15,000
Compañía Industrial Cervecera S.A. (CICSA)	Commercial Court.	Distributor claim for to the termination of distribution agreement.	Evidentiary stage.	US$ 24,000
Compañía Industrial Cervecera S.A. (CICSA)	Labor Court.	Labor trial.	Evidentiary stage.	US$ 37,000
Compañía Industrial Cervecera S.A. (CICSA)	Labor Court.	Labor trial.	Evidentiary stage.	US$ 33,000
Compañía Industrial Cervecera S.A. (CICSA)	Labor Court.	Labor trial.	Evidentiary stage.	US$ 15,000
Compañía Industrial Cervecera S.A. (CICSA)	Labor Court.	Labor trial.	Evidentiary stage.	US$ 35,000
Compañía Industrial Cervecera S.A. (CICSA)	Tax Court.	Several Tax claims.	Evidentiary stage.	US$ 202,000
Sáenz Briones & Cía. S.A.I.C.	Labor Court.	Labor trial.	Evidentiary stage.	US$ 40,000

The Company and its subsidiaries have established provisions to allow for such contingencies for ThCh$

561,378

and ThCh$

893,631

, as of

December 31, 2019 and 2018

, respectively (See

Note 23 – Other provisions

Tax processes

At the date of issue of these consolidated financial statements, there is no

tax litigation that involves significant passive or taxes in claim different to mentioned in

Note 24 – Income Tax

Guarantees

As of December 31, 2019, CCU and its subsidiaries have not granted direct guarantees as part of their usual financing operations. However, indirect guarantees have been constituted, in the form of stand-by and general security product of financing. The main terms of the indirect guarantees constituted are detailed below:

The joint venture Central Cervecera de Colombia S.A.S. (CCC) maintains financial debt with local banks in Colombia, guaranteed by the subsidiary CCU Inversiones II Ltda. through stand-by letters issued by Scotiabank Chile and they are within the financing policy framework approved by Board of Directors, according to the following detail:

Institution	Amount	Due date
Banco Colpatria	USD 27,200,000	May 27, 2020
Banco Colpatria	USD 4,000,000	June 21, 2020
Banco Colpatria	USD 13,500,000	September 1, 2020

The indirect associate Bodega San Isidro S.R.L. maintains financial debt with local bank in Peru, which is endorsed by the subsidiary Compañía Pisquera de Chile (CPCh) through a stand-by letter issued by the Banco del Estado de Chile, this is within the financing policy approved by the Board, and is detailed as follow:

Institution	Amount	Due date
Banco Crédito de Perú (BCP)	USD 2,600,000	December 26, 2020