- Tax season? We revisit the potential impact of indirect tax hikes for the beer and tobacco sectors in light of the tabling of the national budget on 28 September. We think increases in tobacco and alcohol taxes in the looming budget are unlikely, given the impending general election. However in the event of a surprise tax hike, tobacco companies would suffer less immediate earnings downside due to their inelastic demand and lower historic growth base versus brewers. We are Neutral on breweries with a BUY on Carlsberg, and are Underweight tobacco.
Source: Maybank Research - 18 Sep 2012
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