E-Malt.com News article: Malaysia: Brewers get reprieve from excise duty hike under budget 2027

Malaysia’s two main brewers are expected to benefit from the government’s decision not to raise excise duties on alcoholic beverages under Budget 2027, providing relief to brewers following last year’s tax increase and creating opportunities for stronger sales from the extended Visit Malaysia campaign, Business Today reported on October 10.

Hong Leong Investment Bank (HLIB) Research said the absence of further excise duty hikes should enable brewers to capitalise on higher tourism-related spending, particularly through increased on-trade sales at restaurants, bars, hotels and entertainment outlets.

The government has allocated RM935 million to extend the Visit Malaysia campaign into 2027, targeting 47 million international tourist arrivals.

HLIB said the initiative could provide an additional boost to domestic beer consumption, particularly in tourism-driven establishments.

“We applaud the absence of excise duty hikes on alcoholic beverages in Budget 2027, which should allow brewers to better capitalise on the extended Visit Malaysia campaign through stronger on-trade sales,” the research house said in its sector review.

However, HLIB expressed disappointment over the lack of additional measures to address illicit alcohol trading, which continues to pose challenges to legitimate industry players.

Despite a subdued sales volume outlook for 2026, HLIB maintained its OVERWEIGHT recommendation on the brewery sector, citing attractive valuations and a favourable risk-reward profile.

The research house noted that brewery stocks had experienced share price weakness following the excise duty increase in November 2025, with concerns over consumption volumes weighing on investor sentiment.

However, it believes much of the anticipated slowdown in beer sales has already been reflected in current share prices.

Sector valuations are now trading approximately 1.8 standard deviations below their five-year historical average, suggesting potential upside should sales conditions improve.

HLIB said the absence of additional tax increases in Budget 2027 removes a key near-term concern for brewers while the tourism campaign could support a gradual recovery in consumption.

Within the sector, HLIB maintained its BUY recommendations on both Carlsberg Brewery Malaysia Bhd and Heineken Malaysia Bhd, although it expressed a preference for Carlsberg due to its more diversified sales base.

The research house assigned Carlsberg a target price of RM24.86, compared with RM25.65 for Heineken Malaysia.

HLIB believes Carlsberg’s broader sales exposure offers a relatively attractive investment proposition amid lingering uncertainties surrounding domestic beer consumption.

While the brewery sector continues to face challenges from subdued volumes and illicit alcohol trading, the absence of new excise duty increases, coupled with the extended tourism campaign, could support earnings prospects heading into 2027.

Overall, HLIB maintained its positive outlook on brewers, arguing that depressed valuations and the potential for stronger tourism-related consumption provide a favourable backdrop for investors seeking exposure to the sector.


13 October, 2026