Following the recent formal announcement of the country’s 2026 budget, a steep hike in excise duty of 10% on beer is forecast to increase consumer prices by between 3% and 15
Malaysia’s beer market is set to feel the impact of the government’s decision to raise excise duty, with price increases expected from 1 November 2025 when the higher excise rate comes into force. According to the Budget 2026, announced by Prime Minister Anwar Ibrahim on 10 October, duty on alcoholic beverages will increase by 10%.
For the brewing industry this cost hike is likely to be passed on to consumers. Analysts at RHB Research, a research division of RHB Investment Bank, estimate that higher excise will prompt average selling-price hikes of about 4 – 5%; other industry pundits forecast, that depending on alcohol content and channel, rises could reach as much as 15%.
The duty hike comes at a time when Malaysia already has among the highest beer excise rates globally and the sector contributes significantly to the national economy. A study by the Confederation of Malaysian Brewers Berhad (CMBB) estimated that between 2022 and 2023 the industry generated around MYR7.1 billion (US$1.68 billion) annually and paid about MYR3.3 billion in taxes.
Investor reaction from the equities markets was swift, with shares in key brewers such as Heineken Malaysia Bhd and Carlsberg Brewery Malaysia Bhd falling when trading resumed after the budget announcement.
Moreover. industry players warn that the measure could bolster the illicit alcohol trade which is already estimated to account for about a quarter of the beer market in Malaysia. The CMBB expressed regret at the hike and cautioned that it may widen the price gap between legal and unregulated products, leading to revenue leakage and potential public‐health risks.
Historical precedent suggests that the sector may weather the storm and absorb the impact over time. After the last major excise overhaul in 2016, Heineken Malaysia and Carlsberg Malaysia still posted earnings growth of 9% and 15% respectively.
Going forward, brewers are expected to expand their premiumisation strategies and cut costs to mitigate margin squeeze. Consumers, meanwhile, should anticipate price hikes of around 3 – 5% as a baseline, and possibly higher for stronger beers or certain retail channels.
