E-Malt.com News article: Malaysia: Beer and stout spared from rising excise duties, tobacco companies suffer from a serious blow

Malaysian government proposed that excise duty on cigarettes be increased by three sen per stick to 18 sen. With this, the duty for a 20-stick pack is now higher by 60 sen. This brings the total excise hike to 380% over the last five years, the Star reported on August 30.

The beer and stout industry, however, has been spared.

Guinness Anchor Bhd (GAB) managing director Charles Ireland said:”I think it is good news for not only the beer and stout industry but the retail sector on the whole.

“If an increase were announced, it could have triggered a slowdown in sales, maybe even a recession in the entire consumer sector.”

Ireland said the beer and stout market had been undergoing tough times over the past couple of years. “Hopefully, the market will enjoy more stability this year,” he added.

The price of beer and stout in the country is one of the highest in the region.

There had been three consecutive years of duty hikes from 2004 to 2006, amounting to 50%. There was no duty increase from 2007 to 2008.

The costs of raw ingredients in the sector, such as malt, hops and barley, have gone up by 50% to 150% in the last couple of years.

The Confederation of Malaysian Brewers Bhd welcomed the news as well.

“This is a positive move in the light of the challenging times ahead for the industry,” it said.

He added that the Government was prudent not to impose another round of excise duty increase as this would have exerted tremendous pressure on the industry that was already operating in an extremely difficult environment.

The Confederation of Malaysian Brewers hoped the Government would consider maintaining the current duty level for the next few years to allow the industry to remain competitive.


02 September, 2008