Morocco’s Alcohol Tax Hike Threatens Bar Industry, May Boost Smuggling

The PLF provides for an increase in the domestic consumption tax (TIC) from 850 to 1,500 DH/hl for wines, from 1,150 to 2,000 DH/hl for beers and from 18,000 to 30,000 DH/hl for ethyl alcohols (pure alcohol), reports the daily Les Inspirations Eco, specifying that this measure could lead to the closure of several bars and that "some consumers could also change their consumption habits and prefer to buy alcohol in grocery stores and supermarkets".

The measure will have a negative impact on the consumer, says a distributor quoted by the daily, explaining that the price of a very popular beer in Morocco could increase by 2.20 DH per unit for a 25 cl format and 2.80 DH for a 33 cl format, which will lead to a drop in demand. "If demand decreases due to the increase in prices, this could also have broader negative economic consequences at the local level, including repercussions on employment, reluctance to expand and reduced investment," it reads.

An increase in the tax on alcohol consumption, currently around 40%, could lead to a drop in tax revenues, as consumers could rush to smuggled products. The measure raises concerns among bar owners who should benefit from the Africa Cup of Nations (CAN) before feeling the effects of this price increase.