SINGAPORE — The Ministry of Trade and Industry (MTI) has cautioned businesses against profiteering from the recently announced hike in liquor excise duties, which it said must not be a pretext to raise prices unreasonably.
The statement by the ministry yesterday came after media reports quoted the Chairman of Kheng Keow Coffee Merchants Restaurant and Bar-Owners Association as saying a bottle of beer that is priced at about S$6 now could end up costing more than S$7, following the Budget announcement that excise duties for all types of liquor will increase by 25 per cent.
Based on the Ministry of Finance’s (MOF) assessment, even if the additional duty was fully passed on to consumers, the price of a typical can of beer (323ml) should go up by about 20 cents and the cost of a typical bottle of beer (663ml) sold at coffee shops should rise by only about 40 cents.
Senior Minister of State (Trade and Industry) Lee Yi Shyan said the MTI would work closely with the Consumers Association of Singapore (CASE) and the Competition Commission of Singapore (CCS) to monitor the market for unfair pricing and coordinated price hikes which are anti-competitive.
If merchants were to price their alcohol unreasonably, Mr Lee said consumers could exercise their rights, walk away and report errant sellers to CASE.
Any increase in prices of liquor needs to be reasonable, said CASE President Lim Biow Chuan. “Retailers should not take advantage of the hike in liquor duties to profit by increasing prices beyond the tax amount,” he added.
Not forgetting the purchasing power of the consumer dollar, Mr Lim said the association urges consumers to patronise liquor stores that continue to offer good value for money.
They should refuse to buy from businesses that inflate prices and should, instead, seek alternative supplies from businesses with fair and transparent trading practices, he added.
The CCS has, in the meantime, advised Kheng Keow Coffee Merchants Restaurant and Bar-Owners Association to refrain from making statements which could appear to encourage or coordinate efforts among its members to raise prices, as it could be an infringement of Section 34 of the Competition Act.
Standing in agreement with the MTI’s statement against profiteering, NTUC FairPrice CEO Seah Kian Peng said FairPrice “is maintaining the prices of current alcohol products as our existing stocks have not been affected by the tax increase”.
“Pending a review with our suppliers, we will ensure price changes for new stocks will be within the new alcohol tax framework. In the meantime, we have disallowed the bulk buying of alcohol products.”