Contraband beer and liquor seized in Malaysia

More than 530,000 litres of smuggled alcohol have been removed from Malaysia’s Selangor district as Custom officers clamp down on Malaysia’s  illicit alcohol market.

In a report by Singapore’s Asia One, the Selangor Customs director, Datuk Badaruddin Mohamed Rafik confirmed that officers raided 345 stores this year as part of its anti-contraband Ops Outlet which began in 2010.

“We have arrested 111 suspects and of that number, 96 were compounded with a total value of over RM200,000,” he said in a public statement.

More than RM4.29 million (US$1 million) was seized over the last 12 months in the form of 533,274 litres of beer and liquor and then disposed of, after Customs officers checked the stamps on the bottles to check if they had been smuggled in or had entered the country legally.

“Disrupting criminal trade is at the heart of our strategy to clamp down on the illicit alcohol market, which costs the Government millions of ringgit every year. This is the theft from the taxpayers and undermines legitimate traders,” Badaruddin added.

According to the Confederation of Malaysian Brewers Berhad (CMBB), compared to neighbouring Asian countries, Malaysia continues to levy the highest excise tax rate on beer and stout. Following three consecutive tariff hikes from 2004 to 2006, Malaysia now has the second highest duty on beer in the world after Norway. The excise duty for beer is currently RM7.40 per litre (US$1.7)  plus 15% ad valorem tax.

The high excise duty imposed on the industry impacts the affordability of legitimate beer products for consumers and as a result it is estimated that that the Malaysian government loses over RM900 million (US$211 million) annually in alcohol tax revenue including excise and import duties due to the illegal smuggling of contraband beer and stout products.