Brewers Regret Govt’s 10% Hike in Alcohol Excise Duty, Warn of Over RM1.2 Billion Tax Revenue Loss from Illicit Beer

The Confederation of Malaysian Brewers Berhad (CMBB), comprising Heineken Malaysia and Carlsberg Malaysia, has immediately responded to Prime Minister Datuk Seri Anwar Ibrahim’s announcement on the increase of excise duty on alcohol by 10% during the tabling of Budget 2026.

In a statement, CMBB expressed regret over the government’s decision, saying that the hike, which will be enforced starting November 2025, will result in a new rate of RM192.50 per 100% volume per litre.

For illustration purposes

CMBB says the increase in excise duty on alcohol will result in a rise in illicit beer

The confederation added that the decision is regrettable, especially given the current economic challenges and the pressures already faced by the food and beverage industry. 

“Malaysia already has one of the highest beer excise rates globally, and any increase will further widen the price gap between legitimate and illicit beer. This will pose a threat to Government revenue collection, the industry and consumers,” said CMBB.

The statement added that higher beer excise duties are correlated with an increase in the availability of illicit beer. Furthermore, industry estimates that around 25% of beer consumed locally is illicit, resulting in an estimated RM1.2 billion loss in tax revenue each year, with the loss expected to grow with the increase in excise rates. 

The brewing industry contributes RM3.3 billion in tax revenue

CMBB stressed,

“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 to protect Government revenue. Addressing this challenge requires a balanced, collaborative approach – combining enforcement, awareness, and partnership between industry and authorities,”

The confederation iterated that the brewing industry remains a key contributor to Malaysia’s economy, generating RM7.1 billion annually, contributing RM3.3 billion in tax revenue, and supporting over 52,000 jobs across manufacturing, logistics, retail, and hospitality sectors. 

So, what do you guys think of CMBB’s response to the increase in excise duty on alcohol by 10%? Do share your thoughts with us in the comments. 

Also read: Budget 2026: Govt to Raise Alcohol Prices by 10% Starting Nov 2025 to Promote a Healthier Lifestyle