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Local liquor makers struggle against illegal imports

Local liquor manufacturers are struggling to stay profitable as competition from illegal importers continues eat into their margins, said U Soe Lwin, chair of The Myanmar Liquor Association (MLA). Legally imported liquors and spirits like whiskeys, rum and gin are taxed upon entry and this is passed on to consumers.

“The total tax payable for our industry has increased to K200 billion for the 2019-20 year of assessment. The amount of taxes paid by this industry is rising by 25 percent to 30pc every year,” said U Htay Lwin, general secretary of the MLA.

Illegal distributors, however, escape taxes and are able to sell liquor at lower prices in the black market.

Imports of spirits are tightly restricted in Myanmar and it wasn’t until late 2015 that permitted the import of wines was permitted. However, only hotels and duty-free outlets have been allowed to import spirits and beer thus far. This has led to the proliferation of illegal imports, mostly at the border.

The government is in the process of enacting laws intended to relax Myanmar’s existing ban on alcohol imports. Work on a draft legislation has moved to the attorney general for approval, after which it would be presented to the cabinet, according to the commerce ministry.

U Win Thaw, a secretary of the MLA, said the main problem with the impending relaxation of the new import policy is that it does not address the black market situation where alcohol is smuggled through our borders without being taxed.

He added that the legislation should not only formalise, but level the playing field between local producers and foreign liquor importers.

Locally produced liquor brands include High Class, Glan Master and Grand Royal whiskies as well as Mandalay Rum.

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Source : Myanmar Times

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