KUALA LUMPUR (Oct 10): The Confederation of Malaysian Brewers Bhd (CMBB) has expressed regret over the government’s decision to raise excise duty on alcohol by 10% with effect from Nov 1.
Malaysia last increased alcohol tax in 2016 when duties on locally produced hard liquor rose by 150%, and beer and stout duties were rebased to RM175 per litre of alcohol — then the second-highest rate globally.
This latest hike will result in a new rate of RM192.50 per 100% volume per litre — the first increase in nearly a decade.
The increase was announced by Prime Minister Datuk Seri Anwar Ibrahim when tabling Budget 2026 in the Dewan Rakyat on Friday. Anwar said the move was aimed at reducing access to alcoholic beverages and promoting a healthier lifestyle among Malaysians.
In a statement, CMBB said the new increase comes at a time when the food and beverage industry is already facing economic challenges and pressures.
The industry group — comprising Heineken Malaysia Bhd (KL:HEIM) and Carlsberg Brewery Malaysia Bhd (KL:CARLSBG) — cautioned that any further escalation in excise duties could exacerbate the prevalence of illicit alcohol, undermining government revenue collection.
It pointed out that the brewing industry generated RM7.1 billion in annual economic value, contributing RM3.3 billion in tax revenue, and supported more than 52,000 jobs across manufacturing, logistics, retail, and hospitality sectors.
“Malaysia already has one of the highest beer excise rates in the world, and any increase will further widen the price gap between legitimate and illicit beer. This poses a significant risk to government revenue collection, the industry, and consumers,” CMBB said.
According to the industry group, higher excise duties have historically been linked to an increase in the availability of the illicit beer market.
The industry estimates that about 25% of beer consumed locally is illicit, resulting in an estimated RM1.2 billion loss in tax revenue annually.
CMBB said the beer industry will continue to support the Royal Malaysian Customs Department and the government’s Multi-Agency Task Force in their ongoing efforts to curb illicit beer and protect government revenue.
“Addressing this challenge requires a balanced, collaborative approach — combining enforcement, awareness, and partnership between industry and authorities,” the group added.
Heineken shares closed 10 sen or 0.48% higher at RM20.80, valuing the company at RM6.28 billion. Carlsberg rose eight sen or 0.48% to RM16.66, giving the company a market capitalisation of RM5.09 billion.