How will the new beer and liquor tax affect waterholes in Singapore? Will drinkers sober up after a couple of drinks at the pub?
When Finance Minister Tharman Shanmugaratnam announced in Budget 2014 the new 25 per cent tax on alcohol, many regular drinkers in Singapore were appalled.
Although the government’s hopeful result of avoiding “excessive consumption or indulgence” in society has yet to be quantified, food and beverage outlets that serve alcohol as well as nightspots will be one of the most affected by the tax increase, according to a previous report by Channel NewsAsia.
Are Watering Holes Drying Up?
Local news media have reported numbers such as $88 per litre of alcohol content for wine and spirits, and $60 per litre of alcohol content for beer post-tax increment. How do these numbers in turn affect the price that drinkers will ultimately pay for a mug of beer at the pub?
Shannen Fong, Head of Corporate Relations of Asia Pacific Breweries (APB), said, “We have increased the prices of our beers to reflect the excise duty increase. In cases where commercial terms of trade exist between us and our customers, we maintain them. In short, the net gain to APB Singapore for factoring the duty increase and our terms of trade with our customers (where they apply) in our revised beer prices to trade customers is zero.”
However, she did add that as APB Singapore is a manufacturer; they “do not determine the final retail beer prices to consumers” as it is still up to the individual retailers to determine the final pricing to consumers.
Weekender also approached several F&B chain outlets with restaurants in nightspots such as Clarke Quay and Dempsey Hill but most declined to comment.
Drink Up As Usual
Most outlets seem to be adopting a wait-and-see attitude towards the beer and liquor price adjustments.
Nick Flynn, Director of Food & Beverage of Fairmont Singapore & Swissotel The Stamford said, “The recent hike in taxes on alcohols is in its initial stages. Therefore, we are still in talks with our beverage suppliers on revised arrangements, and will have to further evaluate the full impact of the price hike before deciding further on our prices of cocktails and beverages.”
Fine spirit importers William Grant & Sons (WGS), which brings in brands such as Hendrick’s Gin and Reyka Vodka, estimates a 6-10 per cent price increase across the board.
Marcus Low, Regional Marketing Manager, South East Asia & Third Party Markets, commented that although the brands brought in by WGS are positioned within the premium to super premium categories and that the hike will not significantly affect their consumers, they are ensuring that any price adjustment will be moderate at best and “significantly lower than market average”.
In our opinion, if people want to drink, they will drink – no matter the cost. Nonetheless, the alcohol distributors in our survey believe that consumers will not pay for overpriced drinks.
Here is our purported comparison table to help you decide what you would and wouldn’t pay for.
By Cheryl Chia
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