Brewers adopt cautious stance for rest of the year

PETALING JAYA: Brewers face a delicate balancing act in the second half of 2026 (2H26), as higher excise duties, cautious consumer spending and regulatory uncertainty threaten volumes, while pricing and premiumisation can only do so much to protect margins.

At a financial results briefing earlier this month, Carlsberg Brewery Malaysia Bhd (Carlsberg Malaysia) managing director Stefano Clini said the group will be maintaining a cautious stance as it heads into 2H26.

“We already notice customer sentiment getting a little bit shaky and now we start seeing after a few months of discounts, prices are going up.

“Also, in lieu of trade – the excise hike is impacting consumer sentiment a little bit and volume is getting a little bit more soft,” he told reporters.

In light of this, Clini said it was still too early to assess what kind of impact there would be on Carlsberg Malaysia’s business.

“Whether it’s a short-term or longer-term effect, it’s a bit too early to tell, but that’s why we are cautious.

“We believe that in the second half, there will be a bit more volume softness compared with the first half. However we don’t see any risk to business continuity,” he said.

Chief financial officer Anthony Yong meanwhile said the company has been managing its cost effectively.

“From our cost base perspective, we are managing it very well. We are together with the entire Carlsberg group looking at these pressures from a group point perspective.”

Yong added that the group looks at its risks from a supply perspective as well as a price perspective.

“For our raw materials, we do have alternative supplies. The pressure is coming more from the excise increase, rather than the cost increase.”

The government increased excise duties on beer and other alcoholic beverages by 10% on Nov 1, 2025, under Budget 2026.

Meanwhile, Heineken Malaysia Bhd managing director Martijn van Keulen said the company will be “staying agile and focused on execution” as it navigates its business for the remainder of 2026.

“While consumer sentiment and the external operating environment remain challenging, our focus is on responding quickly to evolving demand patterns and executing with discipline across the business,” he said in a statement following the release of its latest financial results, earlier this month.

Van Keulen said Heineken Malaysia will continue to closely monitor inventory levels across its customer and distributor network, while strengthening execution in the areas within its control.

“We remain focused on driving productivity, maintaining disciplined cost management and operational execution, while balancing investments that support future growth and strategic priorities.

“By staying agile and focused on execution, we are positioning the business to capture opportunities as market conditions evolve.”

Meanwhile, an analyst said the main challenge for Malaysian brewers in 2H26 will be sustaining consumer demand amid higher prices and cautious spending.

“The increase in excise duties has raised beer prices, putting pressure on affordability and potentially limiting volume growth,” he told StarBiz.

He added that weaker consumer sentiment could also continue to weigh on discretionary spending, particularly in the lower- and middle-income segments.

“While premium products remain relatively resilient, consumers could become more selective in their spending.”

Another concern is volume growth, he noted.

“Brewers have so far been able to cushion weaker volumes through pricing, premiumisation and cost controls. However, there is a limit to how much higher prices can offset declining consumption without further affecting demand.”

A consumer sector analyst said regulatory and tax uncertainties also remain a concern.

“Further increases in duties or additional measures affecting the alcohol industry could put further pressure on affordability and consumption.

“Meanwhile, input and operating costs remain subject to volatility, particularly for raw materials, packaging, energy and logistics. Sustained cost pressures could squeeze margins, if brewers are unable to fully pass them on to consumers.”

She added that the sector also remains exposed to tourism and geopolitical risks.

“While Visit Malaysia 2026 is expected to support beer consumption through stronger activity in hotels, restaurants and entertainment outlets, geopolitical tensions could disrupt tourist arrivals and spending.

“Overall, the key challenge for brewers in 2H26 will be balancing pricing and margins against the need to protect volumes, particularly as consumers remain price-sensitive and the impact of higher excise duties continues to filter through the market,” she said.