L
lauhunku
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Tuesday October 5, 2010
Hike in alcohol duty will be bad for business, say coffeeshops
PETALING JAYA: Coffeeshop operators are worried of a possible hike in excise duty for alcohol following the recent increase in cigarette prices. Petaling Jaya Coffee Bar and Restaurant Operators Association president Keu Kok Meng warned that a price war could break out among retailers and coffeeshops, if the price of alcohol was raised.
Keu said although manufacturers increased the price of beer and stout in 2009 and in April, retailers and coffeeshops did not increase prices. He urged the Finance Ministry to reconsider any increase in excise duty that it was contemplating. “This time, it will be quite detrimental because judging by what happened in April, the hike will be absorbed by retailers again,” he said in an interview here yesterday.
Keu said a mass slash in prices by retailers and outlet operators would lead to a “price war” in order to attract customers. “Some 95% of our members will not increase their prices. Any increase in price will be bad for our business and many are already slashing prices. “This is something the public does not know. But, any price hike will definitely affect our livelihood,” Keu said.
In April, the price per carton of beer was increased by RM6 and between 40 and 50 sen for 640ml and 325ml bottles respectively, Keu said. Excise duty is about RM7.40 per litre. He also warned that more low-income people would turn to cheap liquor when beer and stout prices were raised. “I often get reports of customers buying low quality liquor and mixing it with beer.
This is bad for health too, not just business,” he added. Deputy Finance Minister Datuk Donald Lim urged the associations to communicate their concerns by sending a memorandum to the ministry. “We have not made a final decision. But, we will look into their concerns,” he said.
