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3. Explain how the imposition of GST on beer in 2015 affect consumption in 2015-2016 period and use a demand-supply diagram to illustrate the impact on beer market (p.3) (6 marks) A tale of two breweries No such thing as too much beer in the market Malaysia's MLM volumes is expected to grow at 4% pa in 2017 (from 3.1% in 2015 and 3.6% in 2016), as we believe the earlier negative shocks to consumption resulting from GST and price hikes should gradually fade out on the back of an improved macro outlook and consumers growing accustomed to the higher cost of living. Beer remains one of the cheapest forms of alcohol and should benefit from consumer downtrading behaviour. A key risk is another round of excise hike by the government, but we do not expect it to be so soon following the hikes in 2016. While some would argue that the government is in dire need to boost its revenue source to reign in its budget deficit, we argue that alcohol excise collection makes up