Liquor producers in low spirits due to revenue drop

Diseases caused by tobacco, alcohol cost state coffers Rs. 100 bn annually – State Minister of Finance

By Chaminda Silva

Liquor manufacturers have informed the Excise Department that they will not be able to meet their revenue targets for the second half of the current year owing to a sharp decline in liquor consumption and increases in the prices of spirits.Excise Department Spokesman Kapila Kumarasinghe said that liquor producers had met Excise Commissioner General MG Gunasiri and informed him that the revenue target of Rs 185 billion set for 2022 would not be attainable.

The liquor producers said they also had to contend with two VAT increases, social security tax, and that the unprecedented hikes in the prices of ethanol, and fuel too, had contributed to a huge rise in liquor prices, causing sales to drop by 20 to 30 percent. The Excise Spokesman said that the liquor producers had pointed out that there would be high consumption of illicit liquor.

The Commissioner General in response said that a foolproof sticker, introduced by the Department, would enable the producers to reach their targets, but the producers pointed out that counterfeit stickers had been found in the market.State Minister of Finance Ranjith Siyambalapitiya, too, had observed, last Wednesday that the country’s alcohol consumption had fallen by between 20 and 30 percent in 2022, compared to last year, Kumarasiri said.

State Minister Siyambalapitiya said that at present taxes accounted for about 75 percent of the prices of alcohol. In the case of cigarettes, taxes amounted to 65 and 75 percent of the prices. He pointed out that anti-tobacco and anti-narcotic campaigners had urged him to raise the ratio to 90 percent.Sri Lanka spends about 100 billion rupees annually to treat those with alcohol and tobacco related diseases, Siyambalapitiya said.