That’s right. Heineken Malaysia Bhd (HMB) has increased (as of Sunday Apr 15) the prices of their products significantly. We at The Locker & Loft were notified about it a few weeks ago.

A keg of Tiger that used to be RM658 is now RM696, while Guinness, also at RM658 is now RM710. Pretty big jump. But if you ask me, prices should come down instead, as the currency issue has improved.

As usual, no reason was given for the increase. I guess we’re all expected to just swallow it quietly, while it dampens consumer sentiment.

(Refer to The Real Cost of Booze for further reading on the BS that some bars get up to)

Dampening the party?

Which brings me to another point. Do you know that breweries charge their clients more for beers when we buy in kegs, ie in bulk?

You can buy one Tiger at a supermarket (duty-paid & legit) for about RM6, sometimes less. This is for an individually-packaged product, which is obviously costlier to produce and stock and transport and recycle. However although we receive our beers in REFILLABLE 30-liter kegs (that we pay a significant deposit for, and we also have to pay for the gas for the beers and their deposits), they charge us more for each beer.

The arrival cost at an outlet for one Tiger (excluding CO2 purchase) is RM7.73, so closer to 8 bucks (excluding all overheads). A supermart probably gets it at RM4+.

This is perverse. When u buy a product that’s sold in 330ml packaging vs 30,000ml packaging, the individual cost for the bulk item should be a LOT lower. If a supermart gets their individually-wrapped beer for RM4, bars should be getting them at below RM4 when refilled into our kegs.

Not RM8. Not by a long shot. Sounds like some profiteering might be goin on.

Beer. Losing its fun?

Breweries cover this by providing (lending, actually) the kegging system and giving monetary incentive to hit ”sales targets” in the contract. I dont think its the job of an outlet to hit a brewery’s sales target. That’s not our role. That is the job of their sales and marketing departments.

The brewery is basically penalizing and rewarding. They penalize bars by over-charging, and reward with the incentive. It seems ridiculous.

When i asked the HMB sales guy about all this, he couldnt answer. (HMB is not known to have the best Sales Dept. An open secret in the industry.).

At a time when many interesting bars are popping up and somewhat rejuvenating the beer scene by selling the drink at very affordable rates, the brewery goes in the other direction. It’s very disappointing. It could reduce consumption significantly. I doubt reasonably-priced outlets (who are already making very thin margins) will be able to absorb the increase.

Maybe HMB prefers quick margins over volume.

Breweries dont seem to have any sort of cooperation or understanding with their clients (outlets) and their consumers (drinkers).

There was no consultation by HMB with the industry about the increase as far as i know. In fact, i doubt there has ever been any two-way conversation about anything regarding the future of the beer industry.

With joints like Uncle Don’s, Brewhouse and their like offering Carlsberg beers at about RM10 a glass all night with many customers, there’s a possibility that HMB’s market share will soon be dented if such outlets expand.

But the problem with having a duopoly is that both breweries seem to collude by raising prices at the same time. This practice has now been made a crime.

Or they’d still be doing it.

I guess it’s back to more house parties with untaxed beers then.

Other options

Did you know that the breweries are unfortunately partly to blame for the increase in tax for certain spirits last year? As the founder of Alcon, i intermittently dealt with the breweries as i battled the authorities on the high alcohol tax issue. I was surprised with their approach.

The breweries were for years pushing the government to tax alcohol according to the strength of the alcohol. So higher alcohol, higher tax. The government finally listened last year. Thus high alcohol spirits like absinthe, some gins and rums had their taxes increased, and hence prices.

But that has now bit them in the ass. The breweries have resorted to lowering the alcohol in many of their own products to lower their own alcohol taxes, compromising their brands.

This has been done rather low key as well so as not to inform their consumers.

The legendary Guinness Foreign Extra Stout is a legend no more. It’s a watered-down wannabe. From 8% to 6.8% to 5.5%, a shadow of its former bulldog self. To do that to such an iconic drink seems like a disrespect to the brand, and this might eventually backfire in the long term. Either way I reckon it’s time to remove the word ”Extra” from its name.

Maybe Guinness Draught has been watered down as well, who knows. It was already at 4.2% before.

Anchor Beer is now 4%. Haha! Most consumers dont know that.

I assume it was done to save them a few bucks. In fact the breweries hardly do anything exciting anymore for outlets or consumers. Same ol same ol.

Financially however both corporations did pretty well last year. Carlsberg Malaysia’s net profit was RM221 million while HMB’s net profit was RM270 million.

They might have pleased their shareholders, but they’re possibly pissing a lot of others off.