The Malaysia Singapore Coffee Shop Proprietors’ General Association said Malaysia already has one of the highest alcohol taxes in the world.

Its president, Wong Teu Hoon, said any further increase would pressure the food and beverage, and tourism industries as both sectors were closely intertwined.

“While the government’s recent efforts to boost tourism are commendable, tax policies should complement these goals rather than weaken the competitiveness of Malaysia’s dining and tourism market,” he said in a statement.

Wong said an increase in alcohol tax could potentially push consumers to smuggled or untaxed alcoholic beverages, “ultimately harming the legitimate market and compromising public safety”.

He called on the government to strengthen enforcement and market control to prevent the illegal cigarette trade from expanding.

“When cigarette prices increase, smokers may turn to illicit products. If not properly handled, the government will inevitably lose a significant portion of tobacco tax revenue,” he said.

Last week, the Confederation of Malaysian Brewers Berhad warned against the proposed increase in excise duty on alcohol, saying it would further widen the price gap between legitimate and illicit beer.

He said higher beer excise duties were correlated with an increase in the availability of illicit beer.

Effective Nov 1, the government will raise the excise duties on cigarettes and alcoholic beverages as part of efforts to promote a healthier lifestyle.

Tabling the 2026 budget last Friday, Prime Minister Anwar Ibrahim said cigarette excise duties would go up by two sen per stick, and by RM40 per kg for cigars, cheroots and cigarillos.

He said heated tobacco products would see a RM20 increase per kg of tobacco content, while excise duty on liquor products would go up by 10%.