OVER the years, the Government has been increasing taxes on locally brewed beers and stouts as well as all imported alcoholic products.
It is estimated that last year, sales of all kinds of alcoholic products was worth RM5.8bil. The total sales of the two local breweries, was about RM1.8bil.
Hence, it can be seen that the local breweries captured only about 31% of the overall market in alcoholic drinks. The bigger players are importers of miscellaneous alcoholic drinks such as wines, brandy, whisky, gin and even beer.
It is understandable why the Government increases taxes on alcoholic products. Firstly, such taxes are regarded as sin taxes and generally are meant to discourage the non-Muslim population from drinking excessively.
Secondly, it is a good way to raise revenue because people will still drink despite the taxes.
The taxes seem to be hurting our local breweries more than imported alcoholic products.
Although tax on imported beers is twice as high as excise duties on local beers, it is not enough deterrent to prevent dumping of cheap imported beers into the local market.
Lately, all sorts of cheap beers from neighbouring countries are flooding our market which, if unchecked, can badly hurt our domestically produced beers.
Even more important, as the excise duties on local beers keep on increasing, people will find it cheaper to switch from local beer to imported wines and spirits.
The local breweries have contributed much to the domestic economy in terms of Government revenue, capital investment, technology transfer, tourism and employment.
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