February, 14, 2020
Beer prices underwent an upward revision in prices in December 2019, as the reduction in Value Added Tax was revoked by a higher increase in alcohol taxes, Sri Lanka’s largest beer manufacturer, Lion Brewery Ceylon Plc said.
“In line with the tax changes announced by the Government, VAT on beer was reduced to 8% w.e.f. 1st December 2019. However, the Government compensated for the reduction in VAT by increasing Excise Duty. As a result, consumer prices of most brands of beer also underwent an upward revision in order to absorb the net increase in applicable taxes,” the firm said in a release.
For the 9 months ended 31st December 2019, Lion Brewery Ceylon Plc earned a pre‐tax profit of Rs 3.708 billion on a turnover of Rs 35.717 billion. The company recorded a 6% decline in its bottom line compared to the same period of the previous year.
“However, considering the challenging operating environment of the year under review – the Easter Sunday tragedy at the commencement of the financial year & the continuous rain during most of the 3rd quarter being the most significant ‐ the Company’s returns may be considered satisfactory.” The firm added.
Notwithstanding the drop in its profits, revenue to Government from the Company’s operations increased by Rs. 6.123 bn to Rs.28.361 bn during the reporting period.
Since the Company operated at a level below expectations, it was compelled to record an impairment of Rs. 538 Mn on account of the brands acquired from Miller Brewery.