Consumers unhappy as coffee shops raise beer prices beyond appropriate levels

SINGAPORE — Despite a warning against profiteering by the Government, a random check by TODAY on 10 coffee shops found that all have raised the prices of beer beyond the levels deemed appropriate.

The price of a bottle of beer was raised by 50 to 60 cents, while prices of canned beer were 30 cents higher.

As of 5pm yesterday, the Consumers Association of Singapore (CASE) had also received four complaints — all lodged yesterday — against jacked-up alcohol prices, its Executive Director Seah Seng Choon said.

Among the 10 coffee shops surveyed, a bottle of beer costs 50 cents more at eight shops and 60 cents more at two. Three shops that sold canned beer charged about 30 cents more than they did last Friday, when liquor excise duties were raised by 25 per cent across all liquor types. These increases were beyond the amount consumers would have to bear even if the additional duty was fully passed on to them.

On Monday, the Ministry of Trade and Industry (MTI) said that based on an assessment by the Ministry of Finance, even if the additional duty is fully passed on to consumers, the price of a typical can of beer (323ml) should increase by about 20 cents, while that of a typical bottle of beer (663ml) should rise by only about 40 cents at coffee shops. The MTI had also warned businesses not to take advantage of the increase in liquor duties by unduly raising prices at the expense of consumers.

The hike in alcohol taxes was the first since 2004 and was among the so-called sin taxes that were increased, with cigarette levies also up by 10 per cent and betting duty rates up to 30 per cent from 25 per cent.

Following the announcement, coffee shops raised their beer prices at varying times across the weekend, said coffee shop assistants who spoke to TODAY. Most of the 10 shops had adjusted the prices by Monday.

Most customers reacted calmly to the hikes, but shop assistants said some were angry. One coffee shop assistant at Ang Mo Kio Central 2 said some customers kicked up a fuss when the hike was introduced. “They said the price hike was like robbery,” she said.

Customers who spoke to TODAY complained about the steep and sudden rise in prices. One consumer, Mr Chandra, who drinks beer four times a week, felt that coffee shops were profiteering by selling old stocks of beer that were bought before the increase in excise duties at higher prices, and that a date should have been set for the price increases to kick in.

CASE President Lim Biow Chuan yesterday reiterated his earlier call to consumers to refrain from buying from businesses that inflate prices and to patronise liquor stores that continue to offer good value for money. This would send a strong signal to businesses not to take consumers for granted, he said, adding that setting an effective date for raising prices would not be good, as it might encourage consumers to hoard alcohol.

The consumer watchdog would address consumer complaints in two ways, said Mr Lim, who is also a Member of Parliament. If there is only one coffee shop charging unreasonable prices, he said it is preferable to allow the free market to decide its sales. However, if several coffee shops are collaborating to raise prices together, CASE will report the matter to the Competition Commission of Singapore.