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Booze price hike a burden to customers, business owners

by April 22, 2016 General

The tax revision in March had seen bars, pubs and coffee shops face a decline of beer sales. ― Malay Mail picThe tax revision in March had seen bars, pubs and coffee shops face a decline of beer sales. ― Malay Mail picPETALING JAYA, April 22 — The increase of beer prices has begun to impact sales and consumption leading to a decline in patronage at clubs, pubs and coffee shops.

Customers are shying away from their regular drinking joints as they are unwilling to pay higher prices for their favourite drink and are considering cheaper alternatives.

On the flip side, business owners are lamenting even what is considered a slight increase in prices is causing them to lose a considerable sum of money, with some experiencing a 20 per cent loss in sales.

A new tax structure on alcohol which took effect on March 1 had led to manufacturers revising their prices.

Malaysia has the third highest tax on alcohol worldwide, behind Norway and Singapore.

Malaysia Singapore Coffee Shop General Association president Ho Su Mong said some members had seen a 20 per cent drop in sales since the tax revision started.

“A shop which used to sell about 300 cartons a month is now selling about 240 cartons. That is at least one fifth of their income taken away,” he said.

“The tax revision implemented in addition to an increase of prices in goods has seen a drop in beer sales in coffee shops. Before the tax revision, a big bottle of Tiger beer would sell at RM15.50 to RM16. It is now being sold at RM17 to RM18,” Ho said.

Ho said beer suppliers should come up with promotional packages for customers at coffee shops to ease the burden of the shop owners.

“Promotions would attract the customers. We operate differently from pubs or bars and do not have our own promotions,” he said.

A price of a carton of 320ml Carlsberg inclusive of Goods and Services Tax (GST) was being sold to retailers at RM162.60 before March.

This has since increased to RM168.54.

The price of Tiger beer went from RM167.85 to RM173.77 per carton inclusive of GST.

Alcohol Consumer Rights Group founder Deepak Gill said the clubbing and pub scene had seen a decline and expected the numbers would drop further as more drinkers would end up choosing cheaper places or just staying home to drink.

“According to some of my close friends who own pubs and bars, people are spending less or looking for the cheapest drink on the menu to fulfil their thirst. People who often go to the clubs and pubs  would probably end up drinking less as they do not want to pay sky-high prices for a full pint of beer or stout,” he said.

“Other consumers who are on a much tighter budget would rather grab a bottle of beer from a nearby convenience store and head home.”

Deepak said people were cutting down on their drinking because it contributed to an increase in their daily expenses.

“Most consumers do not have the luxury to drink or afford an expensive outing anymore,” he said.

“The tax for these beverages is too high and even foreign tourists are puzzled with the prices of these drinks. The timing of the move was poor.”

Across the Road Bar and Pub owner Wynton Jose said his outlet had seen a drop in sales.

“I have been selling three barrels fewer compared to the usual amount of barrels I sell in a month,” he said.

“This has caused me about RM2,000 in revenue. I operate a small bar and this amount is a significant loss to me.”

Wynton said he had no choice but to increase his beer prices as he could no longer afford to absorb the prices after the tax revision.

“I used to sell a full pint of Tiger at RM23.50 but the price has increased to RM25,” he said.

3 Monkeys Café and Pub owner Karen Ooi said business had generally slowed down since March but they had not increased their prices despite the tax revision.

“We do not want to increase our rates at the moment as we are afraid this might turn customers away,” she said.

“Certain drinkers are already cutting down their entertainment expenditure as the cost of living is on the rise. If there is a hike in prices, it will probably be by 50 sen.”