The UK parliament has in May 2012 passed the Scottish minimum pricing law to set alcohol at 50p per unit1 to tackle Scotland's historic alcohol abuse problems. Scotland's pure alcohol consumption in year 2009 is recorded at per capita figure of 11.8 litres2 (compared to Malaysia 0.82 litre per capita in 2011 report3).
“Under the plans, the ¬cheapest bottle of wine would be GBP4.69 and a four-pack of lager would cost at least GBP3.52” – BBC News, 24 May 2012.
Now, let’s see how much that is in Malaysian Ringgit.
A bottle of wine - GBP4.69 x RM4.914 = RM23.02
Four-pack of lager - GBP3.52 x RM4.91 = RM17.30
Imagine, just hypothetically, if the above law were to replace the local alcohol tax law in Malaysia, we wouldn’t be complaining.
With the current Malaysia alcohol tax imposition, the minimum price of a low-end table wine in Malaysia cost at least RM25 per bottle, ordering a glass from the bar is RM16++. A can of beer at the cheapest is at least RM5, four cans are RM20. Compared among our neighbouring countries, Malaysia beer is still the most expensive5.
But will passing of the law in Scotland actually affect the bottle price in Malaysia, especially whisky which seems to become more and more popular in the local drink scene? We asked the two top selling whisky brands in Malaysia about the effect, there are two reasons why the law won’t affect the Malaysia market:
1) Geographically, it only applies to Scotland
Diageo – the company behind Johnnie Walker, responded:
“This legislation relates only to the Scotland market and will not affect other markets or affect prices of product exported out of Scotland.”
2) Whisky per unit is more than 50p
Struan Ralph, Brand Ambassador for Glenfiddich:
“… realistically I don’t think our portfolio could be affected. A minimum price of 50p per unit works out at around GBP15.00 (RM95)6 and all our products are already worth well above that.”
1. A unit of alcohol in the UK is Strength (ABV) x Volume (ml) ÷ 1000 = No. of units.
2. According to the Scottish government report.
3. The Star/Asia News Network, May 29, 2011.
4. GBP1 = RM4.91386, XE.com on 24/8/2012
5. Indonesia at RM3,70, Thailand at RM1,78, Vietnam at RM1,72, Philippines at RM1.31 and China at RM2.11. Singapore is about the same as Malaysia at RM6 per can. – Statistics from The Edge Malaysia.
6. E.g. A bottle of scotch – 40ABV x750ml ÷ 1000 = 30 units. Minimum price of a bottle with minimum price of 50p – 30units x 50p = GBP15 (RM95)
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