Hun Sen Challenges Beer Smuggling Report

Prime Minister Hun Sen on Wed­­nes­­day said that a recent study of Cambodia’s beer market, which found that smuggling costs the government $22 million in lost tax revenue each year, exaggerated the problem.

“We acknowledge that there is illegal beer smuggling, but not that much,” Hun Sen said at a graduation ceremony at the National In­stitute of Education. “The study is such a waste of money and it cannot improve the customs office,” he added.

In its study, the Economic In­stitute of Cambodia, an independent economic think tank and consultancy, estimated that contraband beer accounted for 29 percent of the country’s total beer market in 2006, dwarfing legal imports. Using customs data, EIC calculated that total contraband imports rose from 2.52 million cartons of beer in 2004 to 5.27 million cartons in 2006.

Hun Sen said that EIC’s figures on smuggling are far too high.

“If we have that much beer, we don’t drink it, we will use it to take a bath,” he said, adding that it would mean that each of Cambodia’s 14 million people would have to drink 12 liters of beer a year.

In its report, EIC estimated that from 2004 to 2006 beer consumption in Cambodia grew at an average annual rate of 18 percent, and that per capita consumption was, on average, about seven liters a year.

EIC director Sok Hach declined to comment Thursday on the prime minister’s comments.

In August, Hun Sen lashed out at another EIC report, which found that the government was capturing just 25 percent of the country’s po­tential tax revenues, which amounted to losses of $400 million a year.

He accused Sok Hach of pursuing a political agenda, calling him a “worm.”

SRP Parliamentarian Tioulong Saumura defended the EIC Thurs­day as a serious and reliable institution. “The beer report was based on data published by the government itself,” she said. “The prime minister, instead of showing irritation, it would be more beneficial for him if he looked at the information provided by the EIC,” she added.

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