When a $2 wine becomes a $30 experience in Sri Lanka
A reflection from inside Sri Lanka’s wine trade and tourism scene...
Having been involved in the wine trade here for many years, I’ve seen how the Sri Lankan wine market has evolved and how certain well-intentioned tax policies can quietly work against the bigger picture.
Sri Lanka’s tourism story is finally getting brighter again. But there’s one concern that’s often overlooked the impact of high excise and import duties on wine.
What used to be an entry-level imported wine costing under US $2 at the source now ends up retailing at LKR 2,500–3,500 or more. Not because of luxury branding, but purely due to taxes that were never designed for low-alcohol, low-value wines.
We already know that Sri Lanka has some of the highest taxes on vehicle imports a policy meant to control local demand. But in the case of wine, the story is very different. This isn’t about local consumption alone; wine is part of the global tourism and hospitality experience.
For a visitor who can buy the same bottle for €5 at home, paying over LKR 3,000 here feels less like an indulgence and more like being overcharged. And that perception matters it shapes how visitors feel about our hospitality and sense of value.
Adding to that, we as importers cannot even ask for any A&P (Advertising & Promotion) support from the brand owners for these entry-level wines, even though they generate the highest volumes. With such restrictive pricing and limited margins, it becomes nearly impossible to build brand visibility or maintain consistency in the market.
When a simple glass of wine at dinner costs as much as a good meal, it sends the wrong message. Tourists spend less, restaurants lose sales, and the story that spreads isn’t about our beautiful beaches or culture it’s about how expensive everyday pleasures can be.
A fair tax policy isn’t about making alcohol cheap; it’s about being competitive and sensible. Other tourism-driven countries in our region have understood this by keeping moderate taxes on products that enhance the visitor experience rather than discourage it.
Perhaps it’s time we also look at a more balanced approach, especially for wines below certain price or alcohol levels. After all, these aren’t luxury items they’re part of the dining and travel culture that supports thousands of local jobs.
Let’s make sure Sri Lanka remains known for its warmth, value, and hospitality not for turning a $2 wine into a $30 surprise.
Just some thoughts: from years of seeing how a simple bottle of wine can tell a much bigger story about value, perception, and the future of tourism in our island.
Rajiv Dassanayake – Head of HoReCa & International Brands at International Distillers Ltd
|
|
|
|
