Gab Encourages Authorities to Continue Efforts to Stamp Out Contraband Beers

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Kuala Lumpur: Guinness Anchor Berhad (GAB) announced today that they are delighted to have delivered a strong set of results with double digit top-line and bottom-line growth for its first quarter for Financial Year 2015 (FY15). The company’s revenue increased by 20.7% to RM393.2 million from RM325.8 million in the corresponding quarter in Financial Year 2014.

GAB attributed the performance to the company’s core portfolio of renowned brands and successful introduction of our innovation brands and line-extensions. In addition, the company also attributed the improved performance to the government’s increased measures against contraband beers.

The company is cautiously optimistic of its outlook for the remaining nine months and hopes to continue the growth trajectory by focusing on improving its growth opportunities, accelerating innovation and optimising investment efficiencies.


In terms of challenges this financial year, GAB’s Managing Director Hans Essaadi listed contraband products to be a key concern. “Consumers are becoming increasingly price sensitive and that might push them to buy contraband products which are cheaper because they do not pay the necessary excise duties and taxes. Hence, it is our hope that the Royal Malaysian Customs and the Malaysian Anti-Corruption Commission (MACC) will continue to enhance their enforcement activities against contraband products.”

During the media conference after GAB’s 50th Annual General Meeting, Hans highlighted that contraband products do not only affect GAB, but the entire food and beverage (F&B) eco-system, from manufacturers and distributors to retailers and end-consumers. In fact, the subject was a hot topic during a recent F&B industry roundtable, hosted by Malaysian International Chambers of Commerce and Industry (MICCI), themed ‘Challenges of the F&B industry in 2014 and the prospects for 2015’.
Hans said, “MICCI is in the midst of submitting a memorandum that contains key recommendations from the roundtable to various government agencies. The recommendations include the need to continue to step up enforcement against contraband products and the need for a tax reform on alcohol tax structure as well as the need to raise public awareness that the quality, source and date of manufacture of contraband products are sometimes unknown.”

During the media conference, Hans also discussed the topic of Goods and Services Tax (GST). He pointed out that the company has been very proactive in getting the business and its partners prepared for the transition to the new tax system. The brewery will be committing more than RM4 million to ensure a successful transition to GST which will take effect on 1 April 2015. Besides system changes, the company will also be investing in initiatives to help business partners be fully GST ready.
Hans explained, “As we are uncertain how the implementation of GST will impact our business, we made a real commitment to prepare ourselves for the transition since October 2013. We believe that we have a major role to play in ensuring our business partners are informed and educated on the changes that they need to make to be GST ready.”

He added, “We have a comprehensive GST outreach campaign in place for our distributors, vendors and our outlets. Initiatives include the development of a detailed GST pack that contains distributor business checklist, FAQs and distributor business flow.”


The company has also conducted several engagement sessions with distributors involving GAB’s tax consultant so that the business owners can familiarise themselves with the new tax system. Apart from that, the company has put in place a customised progress tracking system tailored to each distributor’s needs. With this system, GAB is able to identify what specific assistance is required by the distributor at each phase of the transition process.

Distributors are not the only ones benefitting from GAB’s outreach; the company has also been working with its various vendors on the GST front. The company is requiring all its vendors to be GST registered to do business with GAB. As for F&B outlets, the company will be training the company’s sales force so that they can be GST ambassadors when engaging with the outlets.

To showcase the company, Hans also unveiled a new look for its corporate website during the media briefing. The company hopes that the new site will bring about greater interactivity as well as increased depth in information provided.

Over the next few months, GAB will also be launching various festive brands campaigns as well as new brands to its consumers.

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