Concern raised over excise hike

SOUTH Pacific Brewery has expressed concern over the Government’s recent five per cent hike on excise which took effect on June 1.
Managing director Ed Weggemans said in a statement that the Covid-19 had a significant impact on economies around the world and as a result, governments were rallying behind local manufacturers.
The brewery stated that under the Covid-19 state of emergency, the sale and distribution of liquor was either severely restricted and/or completely banned in certain parts of the country.
“We were only able to sell our beer in 30 per cent of the stores and bars,” he said.
“Our sales are down 40 per cent, with the result that excise tax paid to government is down 50 per cent.”
The brewery estimates that during the SOE, the government lost out on K1.3 million in taxes every day from SP Brewery alone, as a result of the liquor ban.
“We are convinced that total alcohol consumption during the SOE did not decrease at all; rather people resorted to illicit alcohol and homebrewed alcohol from which the government receives no tax at all.”
SP Brewery has almost 3,000 customers who sell its products around the country.
Of those, nearly 70 per cent are small medium enterprises (SMEs) who have also suffered from the liquor ban.
The company stated that many of those businesses would not recover fully and had already had to lay off staff.
The brewery recognised that the planned excise increase was part of the 2020 Budget, however, given the unprecedented damage that the Covid-19 has done to the economy it felt unfairly treated. “An excise freeze would be expected under these unprecedented economic circumstances; we are a business that has been with Papua New Guineans since 1952 and we need support,” Weggemans said.
He added that as a result of the dwindling sales, the company’s robust corporate programmes would be scaled down. “This is probably our most regretted loss that we are forced to withdraw.”