Craft beer has gained a loyal following in Singapore, with enthusiasts appreciating its unique flavours, creative brewing styles, and the artisanal care behind each pint. However, one common question lingers among beer lovers: Why does craft beer come with such a hefty price tag in Singapore? Here’s a breakdown of the key factors that contribute to its higher cost.
1. Excise Duties and Taxes
Singapore imposes one of the highest alcohol excise duties in the world. As of now, the duty for beer is $60 per liter of alcohol. This means that the higher the alcohol content in your craft beer, the more tax is levied.
For example:
- A standard lager (4% ABV) incurs less duty than a robust IPA (7% ABV) due to its lower alcohol content.
- When you add GST (Goods and Services Tax) on top of the excise duty, the overall cost increases further.
These high taxes are intended to curb excessive alcohol consumption, but they also make premium products like craft beer pricier.
2. Small-Scale Production Costs
Unlike mass-produced beers from large commercial breweries, craft beer is created in small batches. Craft brewers prioritize quality over quantity, using premium ingredients like specialty malts, fresh hops, and unique yeast strains.
In Singapore’s market, importing these niche beers—often from the United States, Europe, or Australia—incurs significant shipping and handling costs. Additionally, the economies of scale don’t work in favor of craft beer. Smaller production runs mean higher costs per bottle or keg.
3. Cold-Chain Logistics
Craft beer is sensitive to temperature fluctuations. To preserve its freshness and ensure the intended flavors are intact, reputable distributors use cold-chain logistics throughout the beer's journey—from the brewery to your local taproom or store.
Cold storage and refrigerated shipping come at a premium, especially in a tropical climate like Singapore’s. This meticulous handling process is necessary to prevent spoilage and ensure quality but adds to the overall cost.
4. Licensing and Import Costs
Importing alcohol into Singapore requires licensing and compliance with strict regulations. Importers must pay fees for alcohol licenses, which further increase the cost of bringing craft beer into the country.
Moreover, some breweries may charge premium rates for exporting their small-batch brews, knowing that Singapore has a growing but niche market for craft beer enthusiasts.
5. Higher Overheads for Craft Beer Bars
Craft beer bars and retailers in Singapore often have higher operational costs compared to their counterparts in countries with lower rent and labor costs. Factors such as:
- High rental costs for prime locations,
- Wages for skilled bartenders, and
- Specialised equipment for serving beer (like draft systems)
all contribute to the higher prices of craft beer sold at bars and restaurants.
6. Brand and Experience Premium
Craft beer isn't just a beverage; it's an experience. Consumers are willing to pay more for the exclusivity of small-batch brews, experimental flavors, and the storytelling that comes with each beer. Breweries often price their products to reflect the time, skill, and creativity invested in their beers, and these costs are passed on to the end consumer.
Final Thoughts
The price of craft beer in Singapore reflects a combination of factors: government-imposed taxes, cold-chain logistics, import complexities, and the artisanal value of the product. While it may seem costly, it’s important to remember that every sip of craft beer is the result of a meticulous process aimed at delivering a superior drinking experience.
At Ang Mo Liang Teh, we believe in making this experience worth every penny. More importantly, we offer Nett prices, no GST no service charge! But we still provide quality service la. We also source our beers from reputable breweries and distributors that cold-chain their beers, ensuring you taste the brews as they were meant to be enjoyed. Whether it’s a crisp lager or a bold IPA, your beer’s quality is our top priority. Cheers! 🍻