Liquor licence fees set to rise

Restaurants and shops selling alcohol will face higher annual licensing fees this year from the Ministry of Home Affairs General Administration Department, according to government officials.

U Than Lwin, head of Yangon’s Seikkan township General Administration Department, said a proposal has already been sent to parliament, while his department had notified all liquor vendors in the township about the pending change.

“I didn’t hear any negative feedback on the proposed change, so we will go ahead,” he said.

Current annual fees sit at K100,000 for sellers of locally made alcohol, K500,000 for both imported and locally made varieties, K1.25 million for restaurants, and K2.4 million for local producers to distill, store and distribute products.

U Than Lwin said some of the fees could double this year. The ministry also plans to gradually raise some taxes on alcohol products to reduce overconsumption, as well as conduct further raids on shops illegally selling alcohol in conjunction with the customs department and police force, he added.

Raids against illegal imports were in full force late last year, when many shops stopped selling alcohol after a crackdown, as there were few legal avenues to import alcohol.

The government banned importing alcohol in 1995 to promote local production. To get around the ban, some businesses were known to collaborate with hotels to import additional alcohol products that are then sold to restaurants and retailers, while others simply import through illegal channels.

Though the Ministry of Commerce has announced plans to create legislation to allow distributors to sell foreign-produced spirits, wine and beer, the process has been delayed by some local producers aiming to protect their market, said commerce minister U Win Myint last week.

Members of a Mandalay liquor association have asked to freeze foreign imports, but it is inevitable the market will be opened to foreign alcohol, he said.

“We have to open the market sooner or later as consumers request it,” he said.

Local producers say they are working to prepare for more competition from foreign-made brands, but some added the plan to raise licencing fees to produce will affect the bottom line.

Alcohol importer Panda Beverages managing director U Zaw Moe Win said he understands his K2.4 million annual fee will more than double to K5 million this year.

“Local producers will lose out with higher licencing fees,” he said.

There are a number of local, small-scale alcohol producers in Myanmar operating with or without a licence, but only a handful of brands such as Dagon and Myanmar beer and High Class and Grand Reserve whisky enjoy widespread market share.

“Many producers have lost by investing in high levels of production and advertising, and we have to compete with suppliers who produce paying taxes,” he said. “We are in a difficult situation.”

Another retailer who declined to be named said in Dagon Seikkan township the going rate to open an illegal liquor shop is between K10,000 and K20,000 in informal payments a month, depending on the type of licence.

“The shop owner has to pay more when the official demands it,” he said. “But owners can sometimes avoid taxes, a habit that reduces the needs of shop owners to pay regular taxes or fees.”

Officials from the General Administration Department for Yangon Region claimed to be aware of the problem, adding it had raided some 2000 liquor shops which did not pay the correct fees or taxes since the beginning of the year.

Source Myanmar Times

NB: The best way to find information on this website is to key in your search terms into the Search Box in the top right corner of this web page. E.g. of search terms would be “property research report”, ”condominium law”, "Dagon City", “MOGE”, “yangon stock exchange”,"MECTEL", "hydropower", etc.

To learn about the business opportunities in Myanmar click here

To evaluate the various segments of the market that you could possibly enter base on your competencies you can do a Custom Market Entry Strategy Research. You can see a sample report at page "Actual Sample of Client Report”. Click here to go to page.

Do you know that IE Singapore is giving up to SGD 20,000 support for Singapore company to venture into Myanmar? To learn more click here