ECONOMYNEXT – Legal alcohol is too far away for some customers to access in Sri Lanka’s North due to the lack of legal outlets, forcing them to consume illicit products, though new licenses issued recently have helped in other areas, according to an industry official.
While the average distance to a legal alcohol outlet was 45 square kilometers, in the Northern district it was 167 square kilometers.
“Clearly, this opens the door for informal activity as these distances are simply beyond reasonable,” Lion Brewery (Ceylon) PLC chief executive officer R H Meewakkala told shareholders in the annual report.
Sri Lanka has recently issued more beer licenses which has improved sales of legal products, he said.
“It is another lever which the Government should use to curb illicits by increasing access to legal products,” Meewakkala said.
“The issuance of licenses in areas where poor licensed outlet penetration is prevalent has resulted in a positive direction.
“We hope these steps will continue, which will pave the way for a more consistent policy in respect of the alcoholic beverage category.”
The company said it was introducing new beers to tap premium customers.
“New styles of beer and flavours will continue to be introduced to drive premiumization and create consumer experience,” chief executive officer R H Meewakkala said.
“The commencement of the construction of the innovation brewery during 23/24 will be completed this year and will give added impetus to this task.”
Lion has already launched Carlsberg Smooth Draught, Guinness, Lion Ice and two variants of Somersby into the market over the past two years.
The company has revamped its export businesses by exiting 20 markets to focus on Africa, Middle East and South Asia.
“Despite these exits, our International Business grew by 20 percent during the year,” Chairman D A Cabraal said.
Lion Brewery said a tourism recovery had also helped sales, though hikes in value added tax forced them to raise prices.
In the year to March 2024 the firm’s revenues rose from 94,969,346 to 109,755,568 and net profits after tax rose from 6,991,603 to 8,403,478.
Lion Brewery said it had paid cumulative tax contributions totaling 304.9 billion rupees over the past six years. (Colombo/June17/2024)