Lion widens global sales, battling Sri Lanka export regulations

ECONOMYNEXT- Sri Lanka’s largest beer manufacturer Lion Brewery Ceylon Plc said it has expanded its exports into five new markets despite government regulations hindering exports.

"In the financial year under review, we exported a total of 705 containers, an increase of 37 percent in comparison to the previous year," chief executive Suresh Shah told shareholders in the annual report.

"During the year, we entered 5 new markets, namely, China, Qatar, Fiji, Philippines, and Iraq.

"Exports to China commenced at the end of the year under review with an order of 24 containers. Whilst it is still early days, we are hopeful that China will turn out to be a significant market for us."

Chairman Amal Cabraal said that Africa has become the largest market for Lion beer outside Sri Lanka, overtaking the Maldives, where it remains the market leader.

Shah said that Lion beer is continuing to gain traction in the US, where it is widely available in New York.

"In some instances, Lion Stout is the only non US beer listed in the outlet; an indication that the brand is gaining traction in that market," he said.

Lion is gaining recognition in New York through a marketing team present in the city, which the firm will replicate in other markets despite higher costs in setting up such offices, Shah said.

Exports made up just 1.7 percent of the brewery’s revenue at 723.5 million rupees in 2018/19, which was a 48 percent increase from a year earlier.

The firm is boosting exports to manage lower local sales, especially from the tourism sector due to the Easter Sunday attack and due to inconsistent tax policies.

"The exports business whilst being small in comparison to our local sales, is of strategic importance as it acts as a buffer against inconsistent and unfair policies at home," Shah said.

However, government regulations are discouraging exports, he said.

"From a regulatory perspective, we are faced with every possible barrier when attempting to grow our exports business."

"The excise procedures that need to be followed when fulfilling export orders are cumbersome and are a case in point as to why Sri Lanka is placed so low in the World Bank’s ease of doing business ranking."

Shah said that tax refunds of 600 million rupees have been overdue since January 2019.

"This is certainly not an incentive to export. The need is to encourage exports not hinder the effort," he said.

"However, no attempts are made by the regulator to streamline processes either proactively or reactively."

"Clearly, these are not reflective of the country’s need to promote exports," he said. (Colombo/Jul03/2019)

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