AN excise tax that goes any higher will just drive more towards choosing illicit options, which will in turn affect tax revenue for the government, according to Heineken Malaysia Bhd managing director Roland Bala.
“The current excise duty is second only to Norway in the world, and because of the very high excise duties, there is a huge gap between illicit and legal products,” said Bala at a briefing today.
The Heineken MD also noted that, in 2019, the government of the day had realised the importance of the brewery industry, and had maintained the excise duty rate.
He also shared that the industry, largely made up of Heineken and Carlsberg Brewery Malaysia Bhd, contributed RM2.3 bil in taxes to the government a year.
As it stands, Bala pointed out that the illicit trade is still relevant today despite the progress made to reduce this in collaboration with the government in 2019. He added that the illicit trade of alcoholic beverages holds a 28% share of the local market.
The briefing was about Heineken’s results for the quarter ended June 30, which saw the brewery taking a 51% drop in revenue to RM254 mil for the quarter due to its compliance with the MCO, which saw 46 days of operation suspensions for the company.
The 46 days of suspension also saw the company recording zero revenue for the duration. This resulted in a net loss of RM18 mil for the quarter, something Bala noted is “a first in living history.”
At the end of the trading day, Heineken’s shares were last done at RM22, down 20 sen, with 211,500 shares traded. – Aug 14, 2020
