Reduce the Extreme Taxation on Alcohol in Malaysia

Budget 2012 is coming soon and there are rumours that Alcohol tax may be INCREASED! – short version – sign this petition now!

Reduce the Extreme Prices for Alcohol in Malaysia

For too long, responsible consumers of alcohol beverages in Malaysia have been subject to one of the highest prices on the planet for drinks, whether on-trade or off-trade. Although we contribute billions to the economy every year (On beer – $5.6 billion spent; $1 billion taxed in 2010 alone. Excluding liquor, wine, etc), there is no consultation on pricing with us, the stakeholders.

Currently, the high prices consumers face causes them to burn holes in their pockets, even for casual and irregular drinkers. Taxes should be reduced, or at the worst, maintained until Malaysia becomes a high-income nation in 2020. Any increase in tax is not justifiable.

Reasons:

1. We already pay huge duties and taxes on every glass that we drink. It’s unjustified and very expensive at the moment compared to any other country in the region. We already have the second highest duty on beer in the world, after Norway. But Norway has higher income of 8-9 times compared with Malaysia. Which means Malaysians probably pay the most for beer in the world.

2. The per-capita income for Malaysians is still so low and yet we still need to pay for premium prices for normal drinks. Eg: Local beer at a bar costs between $10 – $20, and imported beer $15 – $30. In most countries, beer and soft drinks are about the same price-wise. Even tourists and expats complain of the prices here.

3. High prices cause Malaysians to drink cheap and dangerous backyard brews and compounded hard liquors (CHL) like samsu, because they have been priced-out of the market for normal, safe alcohol. Many local producers don’t have any safety standards or quality checks. These cause various liver-related illnesses.

4. High prices also lead people to substitute alcohol for drugs. Drugs like ecstasy, aramin and such are widely available. Because of expensive alcohol, these drugs provide intoxication at very much better value-for-money.

5. Smuggling and related illegal activities are very high in Malaysia due to the high taxes. Legitimate importers lose out. Also smuggled products are often fake or expired.

6. Outlets must price their drinks more reasonably. Putting a mark-up of 200-300% is not acceptable. All around the world, bars don’t do that. This only happens here. A mark-up of 50-100% should be the maximum. Outlets need to go into the drinks industry as a long-term business, and not look at it as short-term gain. This ‘quick-buck’ and hit-and-run attitude is hurting consumers more.

7. The government should consider giving out legal brewing licenses to serious investors so that they can monitor the industry, rather then just stopping brewing licenses to limit the capacity. Eg: Many foreigners are tempted to invest in and open microbreweries in Malaysia but because of the restriction of license, many have turned to neighbouring countries like Indonesia, Singapore and Thailand. We miss out legitimate and tourist-attracting businesses to our neighbours, and instead give backyard-industries licenses to produce CHLs.

8. The government needs to do studies on the impact of the prices. By increasing the duty, many F&B outlets that survive on volume will be greatly effected as less people will drink. It could also affect the taxation derived. Even worse, some outlets will be forced to shut down. That will further reduce the employment in the market.

9. The huge majority of Malaysians are responsible and social drinkers. According to the WHO, Malaysians consume very little overall, coming in at number 167 worldwide. However, any concern about the effects of becoming an alcoholic should be addressed via education, not more taxes. Eg: If motorcyclists are killed on the road, you don’t solve the problem by banning motorcycles.

THUS, we Malaysians call upon the government, importers, distributors and F&B outlets to attend to the unsustainable situation Malaysian consumers face, and make sincere and effective efforts to price alcohol beverages at a lot more reasonable levels, in accordance with the public’s per-capita income. Comparative studies need to be done by the authorities before any further action is taken on alcohol pricing.

So sign the petition NOW!

Reduce the Extreme Prices for Alcohol in Malaysia

You can also join the cause on Facebook here:

Alcohol-Consumer-Rights Group Malaysia

PS: Catch the live interview with Alcon reps on BFM (89.9) tonight at about 6.30pm with Deep and Ben Ng. Yea!

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