Cambodia losing millions to beer smuggling

Beer smuggling cost Cambodia's Government $US22 million in lost tax revenue last year, according to an economic think tank, which warns that contraband alcohol was on the increase.

Millions of bottles and cans of beer imported from Singapore and Thailand simply disappeared at the Cambodian border before being taxed, the Economic Institute of Cambodia (EIC) said in a report commissioned by two local breweries, Cambrew and Cambodia Brewery Limited.

"With weak governance and law enforcement, 'contraband' beer has ... been booming," the EIC said, adding that the smuggled brew accounted for 29 per cent of the country's total beer market, far outstripping legal imports at 6 per cent.

The EIC says the Japanese beer Asahi, the cheapest foreign brand on the market, made-up the largest percentage of imported beer.

"It is crucial the government take energetic measures to combat 'contraband' beer, especially along the Thai border," it added.

Business experts say the losses represent about 3 per cent of Cambodia's total budget revenue, and have wider implications for anyone trying to produce locally.

According to Bretton Sciaroni, who co-chairs a monthly working group on law, taxation and good governance for the private sector, says the Swiss foods giant Nestle closed its factory in Cambodia several years ago because its locally produced products could not compete with smuggled goods.

Cambodia's Parliament has yet to pass anti-corruption legislation that has been demanded by the country's donors.

-AFP