The real cost of booze

Alcohol tends to be over-priced in many countries, and this is primarily due to two levels of  mark-ups. One is government tax, the other is at the on-trade (ie the outlet level).

Over in Malaysia, the tax is high. However, so are the mark-ups at the outlets, and people tend to blame the government for high prices when outlets also share the blame for this.

Besides last week (when the tax or beer was raised by cents), the alcohol tax hasn’t been raised for TEN years. However, outlets continued to increase prices disproportionately.

Anyway, many outlets add up to 400% for drinks based on their cost of goods sold (COGS), which is kinda extreme. More so for cocktails.

Probably overpriced

Probably overpriced

Here’s an idea on how much the outlets pay for booze, based on suppliers’ pricing.

A glass / pint of Tiger (draught): RM7.45 / RM11.18

A glass / pint of Guinness (draught): RM8.75 / RM13.12

A glass of gin (eg Beefeater): RM4

A glass of vodka (eg Absolut): RM4.40

A glass of Scotch (eg Grant’s / Black Label): RM5.90 / RM7.40

A glass of rum (Bacardi): RM5.28

Pretty decent eh?

Also, they get trade offers, and sales incentives, which includes free kegs / cash / bottles. So the actual cost could be even lower.

There’s this popular joint in BSC that sells mojitos for 30 bucks. I was told by a supplier that they use moonshine rum disguised in a premium bottle! Disgusting if true. At RM30, you can easily afford to give Bacardi or something, rather than a local rum that costs 25 bucks for the whole bottle. I once saw bartenders at Luna Bar pour crap into a bottle of Smirnoff to use for cocktails.

In fact many outlets do this for their cocktails, including hotels. It’s sick.

Beers shouldn't be expensive

Beers shouldn’t be expensive

Anyway, the mark-up (referring to premium drinks, not moonshine) is obviously to cover costs. However, the mark-ups should depend on several factors. Theoretically. Some fancy joints can probably justify higher prices – for example if the place has killer views, a swimming pool, or many professional staff, or nice decor, or spent on ID / decor / sound system, or high monthly costs due to a large space etc.

Unfortunately, even basic to mid-level bars, neighbourhood pubs, and the like also tend to impose very high mark-ups, mostly unjustified. (Prices at many coffeeshops are also quite ridiculous.)

Their extreme mark-ups are probably due to reasons other than mentioned above, such as the desire to make fast money, or greed. Many bar owners are in the business for the money, not the passion of owning and running a bar.

And the F&B business in Malaysia is pretty dirty, that’s for sure. And so are many owners, who underpay their staff with low wages, and charge customers 10% Service Charge, but keep that money meant for staff, for themselves. That’s very common.

Some have decent happy hours, but murder you after that.

So while taxes are high, many outlets are obviously taking advantage as well, thinking that everyone blames the government.

I’ll leave it to the consumer to decide if the bars you go to are pricing their drinks unfairly.

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Politician wants to ban drinks in public

Yup, some clueless government official is at it again.

A new issue has just appeared that will definitely affect us all permanently. A politician wants to ban us from having a drink in any public place. This means you can’t step out of your house perimeter with a drink in your hand anymore. This would mean you can’t have a drink when you’re chilling outdoors in public places, whether during a bbq, at the beach, at a picnic, and at a restaurant or bar with outdoor seating, football games, etc, etc.

Once you allow governments and politicians to start taking away your freedom like that, there’s no stopping them. The religious fanatics will join in try to ban drinks from other places as well, and also ban who knows what else. Because once mindless banning starts, it tends to go further and further.

His main issue is drinking at playgrounds. Agreed, that shouldn’t be allowed. As far as i know, it’s already not allowed, but where is the enforcement?

Already the cops and DBKL etc, abuse their powers, and this guy wants to give them even MORE power?? A very silly idea that will affect us from now till forever.

The only time to say something is now. No use bitching later.

I suggest you make your opinion clear politely at the politician’s FB page below.

https://www.facebook.com/drxavierjayakumar?ref=stream

You can post a comment at the link to the news article on the page.

Pls share this with your friends, on FB, etc.

Thanks, and good luck.

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Ban on open drinking soon

Damn. The Malaysia govt plans to come down on drinking in public, ie anywhere dat’s outside a designated F&B joint/area.

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A brewery contact informed me over the weekend that the law is already being drafted. WTf man. Without any consultation?? They shd have at least spoken to industry players and Alcon before comin out with stupid-ass rules.

This means we wdnt be able to drink booze at beaches, picnics, parks, riversides, outdoor events, maybe even in your own cars, and probably bbqs too (unless u doin it within the garden of your house). Dats boooshit man. I aint gonna take it quietly. Alcon‘s gonna get involved and stir sumtin up. Stay tuned..

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Alcohol-tax time??

Budget 2012 will be tabled next week by the government.

Will the tax on alcohol be raised further, although it’s already one of the world’s highest?

I dont know. An outlet owner told me this – “my supplier advised me to order extra stock  now as the tax is going up.”

Malaysian drinkers - screwed for years by the govt and the outlets

Maybe its a rumuor. Either way, that’s why Alcon exists – to fight for fair prices for us from the government and outlets.

Alcon has gotten a lot of media and publicity lately. Hopefully there’s an impact.

We plan a submit a memo to the Ministry of Finance in a few days, so please dont just sign it, but publicize and get your friends to sign too. If we dont hit at least 1.000 signatures, there’s no point handing it over.

Click here.

Do it!

 

PS: Catch the live interview with Alcon reps on BFM (89.9) this Friday at about 6.30pm with me and Ben Ng. Yea!

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