Malaysia: Brewing industry calling on government to maintain current excise duty rates

Malaysia’s brewing industry is calling on the government to maintain the current excise duty rates on beer, stressing its significant contribution to the economy and warning against the risks of fuelling illicit trade should tax rates rise, The Malaysian Reserve reported on October 8.

The Confederation of Malaysian Brewers Bhd (CMBB) comprising Carlsberg Brewery Malaysia Bhd and Heineken Malaysia Bhd had last week released the Economic Impact Assessment of the Brewing Industry in Malaysia.

The independent study, conducted by the South-East Asia Public Policy Institute in collaboration with the University of Nottingham Malaysia, highlighted the sector’s role in GDP, job creation and tax revenue.

Between 2022 and 2023, CMBB contributed an average RM7.1 billion annually to economic growth, supported 52,400 jobs, and generated RM3.3 billion in annual tax revenue.

The brewing industry accounts for 0.4% of Malaysia’s GDP and 1.5% of the nation’s total tax revenue, underscoring its strong multiplier effect across manufacturing, logistics, retail and hospitality.

“Brewers are significant contributors to Malaysia’s economy — not only through taxes but also by driving employment and industrial activity across manufacturing, logistics, retail and hospitality sectors,” said Carlsberg Brewery Malaysia MD Stefano Clini and Heineken Malaysia MD Martijn van Keulen, in a joint statement as members of CMBB’s governing council.

CMBB stressed that retaining existing excise duty rates, alongside robust enforcement, is critical in curbing illicit trade, which threatens government revenue.

With Malaysia already ranking among the countries with the highest beer tax rates globally, any further increase could widen the price gap and make illicit beer more attractive to consumers, the confederation cautioned.

“We commend the ongoing efforts of the Multi-Agency Task Force led by the Ministry of Finance (MOF) in combating illicit trade. Our sincere appreciation goes to Royal Malaysia Customs Department (JKDM) and the Royal Malaysia Police (PDRM) for their stepped-up enforcement against smuggling and illicit beers. We look forward to further collaboration with the government to reinforce the brewers’ economic contribution, strengthen enforcement, and support Malaysia’s broader policy aspirations,” CMBB said.

The confederation reaffirmed its commitment to supporting Malaysia’s long-term development priorities, including the 13th Malaysia Plan (13MP), the New Industrial Master Plan 2030 (NIMP 2030), and the Circular Economy Blueprint, by working with government agencies and stakeholders to advance sustainable growth and competitiveness.