Brewery unhappy with excise increase

SOUTH Pacific Brewery Ltd (SP) is quite upset with the 2020 National Budget as it could lose business, the company said.
SP Brewery corporate affairs manager John Nilkare said the Government’s revenue-collection measures of increasing excise on social drinks would affect the revenue collection as their business would shrink.
He said SP Brewery felt the effect on business would be opposite to what the Government thought in making high revenue but that was where they got it wrong. They did not think about the business shrinking, he said.
Nilkare said they put together a strong submission asking the Government for a freeze because the 2018 excise collection had plummeted because of affordability issues.
He said successive governments between 2015 and 2018 had put excise on alcohol by 5 per cent every six months, and up to 2018 it reached the affordability threshold and consumers refused to pay extra, resulting in a huge drop in their sales – by 25 per cent and resulted in PNG Customs collecting K36 million less.
“So based on this trend, we know through our research and basically through our experience in the market, we know our consumer behaviour. And what will happen with this 10 per cent excise increase, plus 5 per cent in May, plus 5 per cent in November – all those will encourage people to drink all forms of alcohol that do not pay any excise at all.
“So the Government’s rational in raising excise will result in more collection is absolutely awkward. This is wrong, it is not going to happen.”