Government defends ‘beer-friendly’ budget despite concerns

The Government today defended the ‘beer-friendly’ budget despite concerns raised by some members in the Government and Buddhist monks.

Cabinet co-spokesman Dayasiri Jayasekara said that the public have been misled on the pricing formula for beer presented through the budget.

He said the Government is keen to discourage the consumption of hard liqueur.

Fitch Ratings said this week that Sri Lanka’s beer industry will regain market share from hard liquor following the more favourable tax regime for the segment announced in the Government’s budget on 9 November.

The Sri Lankan government’s 2018 budget reduced excise taxes on strong beer by 33% and raised that on hard liquor by 2%, effective immediately.

The budget also introduced a Nation Building tax of 2% on all alcoholic beverage sales, which will take effect from April 2018.

With the latest tax revisions and barring further changes, Fitch Ratings said it expects beer’s market share of total reported alcohol consumption in Sri Lanka, as calculated by Fitch, to increase to around 24%-25% in the medium term, posting an average volume growth of 22% over 2017-2019.

Fitch also expects hard liquor sales volumes to contract 2% over this period, reversing some of the market share gains it made in the last few years. Hard liquor’s share rose to 84% in 2016 from 71% in 2014, after a series of tax increases for beer. The market share for beer fell to 14% from 27% over the same period. (Colombo Gazette)

LEAVE A REPLY

Please enter your comment!
Please enter your name here