Malaysia: Heineken calls on government to maintain current excise duty on beer

Heineken Malaysia Bhd has called on the government to maintain current excise duty levels on beer in Budget 2026, warning that further increases would fuel the illicit alcohol trade, erode tax revenues and harm legitimate businesses and Malaysian jobs, BusinessToday Malaysia reported on September 28.

Its Managing Director Martijn van Kuelen said Malaysia already ranks among the highest globally in beer excise rates, a level more typical of economies with GDP many times larger than Malaysia’s.

“Any increase in excise will significantly widen the price gap between legal and illicit beer, further fuelling the illicit trade, particularly in East Malaysia.

“Illicit beer is cheaply priced, high in alcohol content and often produced with unknown standards. Many of these products do not comply with local laws,” Martijn said to BusinessToday in an email interview.

He warned that such a shift would undermine the government’s fiscal goals, as rising consumption of untaxed products would reduce revenue collection and jeopardise the industry’s contribution of over RM2 billion annually.

Martijn emphasised that a balanced tax policy is essential to protect consumers and preserve jobs across the value chain.

Acknowledging the government’s fiscal pressures, Martijn urged policymakers to focus on stronger enforcement against illicit trade rather than tax hikes.

“We commend the government’s ongoing efforts and encourage continued focus in this area to recoup lost revenue rather than increase taxes,” he said, adding that while tax revenue is vital for national development, fostering a conducive environment for industries to thrive will secure long-term employment and sustainable growth.

Furthermore, he cautioned that raising excise duties in Malaysia’s already high-tax environment would be “counterproductive” and risk pushing consumers further toward illegal products.

He also highlighted regional competitiveness concerns, noting that neighbouring countries with lower tax regimes could attract both consumers and businesses.

“With rising business costs from global uncertainties, evolving fiscal regulations and increased utility tariffs, fiscal policies must account for these broader economic pressures,” he said.

He recommended that the government consider targeted schemes to boost domestic production and enhanced enforcement against unregulated trade to protect consumers from unsafe imports and preserve the integrity of Malaysia’s regulated market.

“A stable excise regime, backed by robust enforcement, is crucial for safeguarding revenue, protecting consumers and ensuring Malaysia remains competitive within the region,” Martijn stressed.

Budget 2026, to be tabled on Oct 10, is expected to outline measures to strengthen government finances while balancing economic growth and cost-of-living concerns.