KUALA LUMPUR — Bar operators in Bangsar are warning of a potential 20% rise in drink prices when the government’s new 10% excise duty on alcoholic beverages takes effect in November 2025.
Bangsar Commercial spokesperson Joshua Devarajoo said the new tax, announced under Budget 2026, could raise final retail prices by up to 20% once logistics, service charges, and the sales and service tax (SST) are factored in — squeezing margins for bar owners already struggling with high operating costs.
He said many regular patrons, especially younger working adults, are price-sensitive and may reduce their spending.
“If a beer increases from RM18 to RM22, that difference adds up quickly. We anticipate an initial 10 to 15% dip in sales before the market stabilises,” he told Scoop when met recently.
Joshua said many businesses in Bangsar have little room left to absorb additional costs.
“Operators have been absorbing price hikes from suppliers and utilities. While we’ll try to minimise the impact on customers, price adjustments are inevitable for certain products,” he said.
He warned that smaller and independent bars may find it harder to survive.
“Larger venues have stronger supplier relationships and higher volumes to offset costs. For small operators, this hike could mean the difference between staying open and shutting down,” said Joshua, who also owns one of Bangsar’s oldest bars, Bilique.
Bar owners are now negotiating with suppliers for better terms, exploring bulk purchases, and sourcing more local products to manage costs before the new tax kicks in.
Joshua, however, expressed concern that higher prices could drive some consumers toward cheaper or illicit alcohol.
“When legal alcohol becomes too expensive, the illicit market tends to grow. It’s bad for consumers’ safety and damaging to legitimate businesses,” he said.
He urged the government to balance public health goals with business sustainability.
“We support responsible drinking initiatives, but policies must not penalise licensed operators. Stronger enforcement against illicit alcohol would be a better approach,” he added.
Meanwhile, the Confederation of Malaysian Brewers Bhd (CMBB) — which represents Heineken Malaysia Bhd and Carlsberg Brewery Malaysia Bhd — said the increase comes at a difficult time for the food and beverage sector.
The group warned that further excise hikes could worsen the prevalence of illicit alcohol and undermine government revenue collection.
Malaysia last raised alcohol duties in 2016, when taxes on locally produced hard liquor surged 150%, and beer and stout duties were rebased to RM175 per litre of alcohol — then the second-highest rate globally.
The latest increase will raise the rate to RM192.50 per litre of pure alcohol, marking the first hike in nearly a decade. — October 12, 2025