Myanmar Liquor Association urges stricter control over grey market

The Myanmar Liquor Association (MLA) released a statement last Wednesday urging the government to tackle the grey market and implement more transparent regulations for the valuation of liquor imports.

The statement also provided a clarification that MLA does not object to the importation of liquor if there is a “level playing field” for the local manufacturers.

“The MLA has always taken the stand that it is here to promote the local liquor industry. We have not objected to any business that wishes to start up in Myanmar, provided they set up their processing or manufacturing factilities in our country. If they import the products it should be done so that the local manufacturers are not penalised,” said U Soe Lwin, president of MLA.

The association warned that the relaxation on the ban does not tackle the grey market where illegal trading is conducted resulting in revenue and duties lost for the government.

“The main problem we see with the relaxation of the importation policy is that it does not address the “grey market” situation where the wines are smuggled through our border areas and they are not taxed and government revenue is not paid. The situation needs to be equalised and formalised so that the market is fair towards the local manufacturers [who are paying taxes and dues].” pointed out U Win Thaw, the secretariat of MLA.

The local liquor manufacturers pay more than K180 billion towards taxes and other government levies every year, the statement said. The non-payment of the revenue is estimated that as much as a fifth is lost in unpaid taxes every year in “wine grey market” activities, it continued.

“Big international players have very deep pockets and can create situations where the local producers are put into a disadvantage. We urge that the government give due consideration to the local industry and create a level business situation where we can all compete in a fair and just playing field,” said U Htay Lwin, MLA general secretary.

MLA urged the government to look into the illegal market and assist the local industry in competing effectively through equal taxation rules for both local and international manufacturers.

Myanmar’s liquor and alcohol industry has long been mired in accusations of protectionism. U Thein Sein administration permitted the import of wines in late 2015, but only hotels and duty-free outlets have been allowed to import spirits and beer.

The ban on alcohol imports has resulted in massive quantities of foreign alcohol being smuggled into Myanmar, fuelling illicit trade. Customs department data suggests that 1.3 million litres of distilled spirits valued at almost US$8 million were legally imported in 2017-18. The black market is estimated to be worth several hundred million dollars annually.

Members of the business community say that the new Competition Commission should look into the restriction on the import of spirits which are not in the consumers’ interest.

Commerce ministry assistant secretary U Khin Maung Lwin last month told The Myanmar Times that the ministry is drafting a bill allowing the import of foreign spirits.

Source: Myanmar Times

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