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COLUMN

Cap Kapak brandySEPTEMBER 28 ― In 2016, the Barisan Nasional (BN) government raised the excise duty for locally-produced hard liquor by a whopping 150 per cent, from RM24 per litre to RM60.

The Malaysian Liquor Manufacturers and Bottlers Association said in 2016 then that the excise duty hike would raise local liquor prices by almost 75 per cent.

You can get local brandy at convenience marts for RM8.75 for a 170ml bottle or RM15.95 for a 350ml one, with a high alcohol content of 37 per cent. Bootleg liquor is even cheaper.

Two years ago, the BN government also changed the excise duty structure for beer from RM7.40 per litre and 15 per cent ad valorem tax, to RM175 per 100 per cent volume per litre, which means a shift to taxes based on alcohol content from the previous volume-based tax structure. The greater the alcohol content, the higher the taxes. The brewery sector reportedly experienced an overall net excise duty hike of 10 per cent.

Malaysia’s beer excise duty is reportedly the third highest in the world and second highest in Asia.

Analysts had warned the government then about the contraband alcohol market after the 150 per cent hike in excise duty for locally produced hard liquor.

Two years later, under the Pakatan Harapan (PH) government, 11 Malaysians died from methanol poisoning, along with 29 others (mostly foreigners) as of September 27. Fifty-five people, including 11 Malaysians, survived the poisoning by tainted alcoholic drinks.

The Malaysia Liquor Manufacturer and Bottler Association blamed the spate of methanol poisoning on black market liquor.  They pointed out that the previous administration had, in 2016, ignored their concerns and raised taxes on various local alcohol products by between 150 and 560 per cent.

Kingfisher ― whose products were allegedly consumed by the victims ― also highlighted that there were bootleg versions of its beer in Malaysia.
 
Methanol is the simplest form of alcohol, which is closely related to ethanol that is normally found in wine, spirits, and beer, but far more toxic. Methanol is produced in very small amounts during fermentation, but manufacturers ensure the safety of their spirits by using technology specifically designed to separate methanol from ethanol. Wine and beer have small amounts of methanol, but not at toxic levels unlike home brews. Methanol may not be properly differentiated from ethanol in home-brewed alcohol because home distillation is far less sophisticated.
 
The new government should fix the mistakes of the previous administration by cutting taxes on alcohol products so that poor Malaysians and migrant workers do not have to resort to potentially poisonous bootleg liquor.
 
The spate of fatal methanol poisoning is proof that bad policy can kill. Raising alcohol prices beyond the point of affordability may not necessarily reduce consumption as consumers can simply switch to the cheaper bootleg versions.
 
Stricter enforcement against illicit alcohol isn’t the solution either because there is only so much resource-strapped authorities can do.
 
There is yet a study on whether the 2016 tax hikes on local alcohol products actually led to a decrease in overall alcohol consumption, or whether the bootleg market simply expanded.
 
In the case of tobacco, massive excise duty increases in 2014 and 2015 led to a growth in the illicit cigarette market, where one in every two cigarette packs sold here is illegal. A pack of cigarette retails at about RM15.50, five times more expensive than illegal brands that are sold for as low as RM3.
 
The only difference with bootleg alcohol is that an illegal cigarette has yet to kill someone (not immediately anyway, if one were to argue that tobacco kills).
 
Blaming the methanol poisoning victims themselves is not helpful either. Sure, they could have chosen not to drink, but everyone needs time off, especially impoverished Malaysians and migrant workers who labour at below minimum wage and live in tight spaces with little opportunity for cheap leisure.
 
Going to the cinema costs about RM25 (including popcorn). There are few public parks and open spaces in a city filled with malls. Migrant workers can’t really venture out far beyond where they live either, for fear of harassment. (Watch the film One Two Jaga).
 
Poor Malaysians do not have it easier either, working double jobs just to keep a roof over their heads... many of these being tiny cramped PPR flats.
 
So what can one do besides drink and have sex?
 
While the middle class can drink their sorrows and stress away at neighbourhood pubs, the disenfranchised cannot even afford legitimate local alcohol.
 
Liver disease and lung cancer may somewhat tax the health care system (though obesity poses a far heavier burden), but Malaysia cannot tax its way to a healthier society.
 
If people complain about the way alcoholics and smokers fill public hospitals, then the government should divert alcohol and tobacco taxes to fund health care.
 
As long as people want to consume alcohol and tobacco, they will continue to do so even if it means using unsafe black market products.
 
PH should cut alcohol taxes as a short-term solution so poor Malaysians and migrant workers can afford safe legal liquor. The long-term solution, of course, is more multi-faceted ― provide free recreation in the city, improve public housing, protect migrant workers’ rights, and raise wages.
 
The government cannot have any more deaths on its hands because of bad policy.