Philippines, Manila: Philippine brewers raised prices of beer on February 2 by 14%, or as much as PHP2 a bottle to recoup additional production costs and to cover an increase in taxes, according to Dow Jones. Food and beverage conglomerate San Miguel Corp. and its chief rival Asia Brewery Inc. had earlier advised its dealers of the price adjustment, which analysts fear could hurt consumer demand for beer.
In December 2004, the government passed a new law increasing taxes on so-called 'sin' products such as beer, liquor and cigarettes. Collection of the taxes started January.
Publicly-listed San Miguel last year saw a 13% increase in sales of beer to a record 174 million cases. Asia Brewery is owned by tycoon Lucio Tan and doesn't release any sales figure.
Astro del Castillo, managing director at First Grade Holdings Inc., said that the price increase will adversely affect consumption, but the impact will be harder on liquor makers than beer producers. He said product loyalty is less pronounced on liquor than in beer. Liquor producers Ginebra San Miguel Inc. and Tanduay Holdings Inc., also owned by Tan, both raised prices in December in anticipation of the additional tax.
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