Carlsberg: Excise duty increase on liquor unlikely

From the Business Times:

CARLSBERG Brewery Malaysia Bhd's chief believes there may not be an excise duty hike for brewers this year.

This would be a bad time to do so as the market has just started to improve following three years of no duty hikes, managing director Soren Holm Jensen said.

He expects consumption of beer and stout in Malaysia to increase by a "low single-digit" percentage this year.

Brewers raise product prices when the government imposes higher duty and this results in consumer turning to cheaper and black-market alternatives. With that, the government stands to lose potential revenue, he noted.
Jensen estimated that the illegal market in Malaysia has dropped to about 20 per cent now.

"I don't expect (a hike) this year ... but that's just a gut feeling," he said yesterday on the sidelines of a press briefing on the company's purchae of Carlsberg Singapore.

Some analysts, however, think that with the government having to deal with a widening budget deficit, a higher excise duty on beer may be possible. The present excise duty of RM7.40 a litre is the second highest in the world, after Norway.

I sure hope not. Not after they splurged some 387 million on a Singapore distribution that they lost revenues from a couple of years ago. Lets see how this pans out. After the revenues and profits from the Singapore are adjusted, how much dividend growth is left? Financing isn't the cheapest right now. I don't see them growing anywhere outside of GDP. Singapore and Malaysia are both affected badly with negative GDP this year.

They cut dividends this year for "growth opportunities." Singapore isn't really a growthy place, it is quite matured.