Bhutan Moves Against Suspected Alcohol Hoarding as Prices Rise Before 2026 Tax Change

Beer shortages deepen while factory prices stay steady

A carton of canned beer that cost about Nu 1,380 a month ago is selling for Nu 1,550 to Nu 1,750 in parts of Bhutan, even though its price at the factory remains near Nu 1,350. The widening gap is drawing scrutiny as authorities try to contain suspected hoarding before a new alcohol tax system takes effect on January 1, 2026.

As of November 7, 2025, popular beers including Druk 11000 and Druk Lager, along with spirits such as Ter, Misty Peak and Black Mountain Whisky in 180 ml bottles, are becoming difficult to find. Shops, bars, karaoke lounges and neighbourhood groceries report shortages from Thimphu to border towns. Manufacturers say production and dispatches are continuing without interruption.

A bottled lager previously priced at Nu 70 now sells for Nu 85, while some restaurants charge as much as Nu 100 for a can of beer. At Nu 85 per can, sales from a carton containing 24 cans would bring in about Nu 690 above the factory price, more than doubling the margin described before the increases.

Shopkeepers say deliveries can sell out within hours, and replacement stock takes longer to arrive. Some outlets have been without beer for weeks despite placing large orders. Distributors deny hoarding, but retailers and consumers suspect that dealers and middle agents are holding inventory to sell at higher prices after the tax change.

Bhutan Brewery Private Limited continues to dispatch an estimated 300,000 cartons a month to about 50 direct dealers. That continuing flow has put the movement of beer beyond the factory gates at the centre of the investigation. Wines produced by the Army Welfare Project, however, have also been reported out of stock at the factory.

What will change on January 1?

Bhutan's new alcohol tax structure combines a 100 percent customs duty on imports, a 5 percent Goods and Services Tax (GST), and an excise levy of Nu 1,200 per litre of pure alcohol. It will replace the current system of 200 percent sales tax when it begins on January 1, 2026.

Excise is a tax on particular products. Under the new arrangement, the alcohol levy depends on how much pure alcohol a drink contains, rather than simply the volume of liquid in its container. A stronger drink therefore attracts more excise than a weaker drink of the same size.

A standard 750 ml bottle of whisky with an alcohol content of 42.8 percent, currently costing around Nu 325, is expected to reach roughly Nu 643 under the new structure, assuming similar factory and distribution costs. A 500 ml can of Druk 11000 that has sold for about Nu 65 could move closer to Nu 90 once the applicable taxes are included. Distribution and retail costs could still affect those estimates.

Customs duty applies to imported products at the border. Domestic producers will still be subject to the excise component, while GST is collected at the retail stage. GST is a broad consumption tax charged on value at the point of sale. Together, the applicable charges are expected to increase the shelf prices of many popular drinks.

Tobacco products will also face higher excise taxes, while pan masala products continue to be taxed at 30 percent. Policymakers expect higher prices to reduce consumption over time. Before the change, however, the gap between current and expected prices gives traders a reason to acquire stock now and sell it later.

Why officials fear stockpiling

Department of Revenue and Customs (DRC) Director General Sonam Jamtsho explained that the temporary controls introduced this year address the opportunity for speculative trading created by the tax change. He described why a tax aimed at specific products can encourage businesses to accumulate them before prices rise.

The risk of hoarding is higher with excise tax as it targets specific products, creating a clear before and after price gap. People might try to stock up now and sell later at higher prices.

Sonam Jamtsho also said only established importers and distributors would be allowed to trade during the transition. New entrants are barred until the new system stabilises. The restriction is intended to prevent operators with no established record in the trade from entering simply to exploit the period before the new taxes.

Retailers suspect some distributors and middle agents are building private inventories. Some dealers reportedly refuse regular customers or offer smaller allocations than their usual orders. Others allegedly sell products in sets, requiring buyers to take less popular brands alongside drinks that are in strong demand.

Consumers have become wary enough to visit back rooms and storage areas to check for stock. Distributors insist they are following the rules, while customers point to empty shelves and rising prices. Manufacturers have also reportedly turned down some requests for larger shipments in an effort to avoid supplying stockpiles.

Officials say manufacturing dates could help identify suspicious trading after the tax change. Alcohol produced in 2025 and sold in 2026 at sharply higher prices may draw scrutiny for possible hoarding. The original guidance describes alcohol as typically having a shelf life of 12 months and says older labels should not flood shops in January if stock has been moving normally.

Consumers are being encouraged to report suspicious batches bearing 2025 production dates when they are sold at inflated prices next year. Those reports would allow regulators to examine how the goods moved through the supply chain and what prices were charged.

Quotas govern supply through the transition

Authorities have introduced temporary permit and quantity controls for alcohol, tobacco and pan masala. Importers and distributors require permits, and their permitted volumes are limited during the final months before the new tax system begins.

Imports are capped through November, with a planned pause on new imports in December. Businesses have been told to arrange their permitted November shipments so that supplies can cover December demand. Locally produced alcohol and beer are being released to verified distributors and retailers under monthly quotas.

Shopkeepers in different districts say their allocations can be only a few cartons of each brand at a time, often five cartons per brand per order. They argue that those quantities fall below what they need during the busiest part of the year.

The DRC says quotas are based on the previous year's supply and demand data. Their purpose is to meet genuine consumption while limiting speculative purchases. Officials also say their review of factory prices and distribution volumes indicates that the quota system is not responsible for the sudden price increases.

The transition follows this timetable:

• During 2025, interim permits, quotas and restrictions on new traders control supplies of alcohol, tobacco and pan masala.
• Through November 2025, imports are capped, and permitted shipments are expected to cover December demand.
• In December 2025, authorities plan to pause new imports.
• On January 1, 2026, the new alcohol tax structure takes effect.

Retailers and officials are approaching the same problem from different positions. Shops want enough stock to serve seasonal customers, while regulators want to prevent unusually large purchases from becoming private reserves for later resale. The pressure is expected to continue until permitted imports and inventories are better matched to actual consumption.

Bars and groceries struggle to keep drinks available

Small groceries, hotel bars and karaoke lounges report frequent stockouts and slower deliveries. Some have gone weeks without receiving beer despite repeated orders. Owners say they are reducing the range of drinks on their menus and rationing popular products to avoid empty refrigerators during busy evenings.

Several bar owners say dealers have refused supplies outright or required them to accept mixed sets of brands before receiving any stock. This practice leaves businesses buying products that sell slowly so they can obtain the drinks customers request most often.

Restaurants that manage to secure beer are charging up to Nu 100 a can in some cases. Consumers planning winter gatherings are finding that familiar purchases no longer fit their usual budgets. Families and young workers are already feeling the increases, weeks before the new tax begins.

Cigarettes are also becoming more expensive. In Thimphu, a box containing 20 packets has risen from around Nu 2,000 to about Nu 2,600 in recent weeks. Similar price pressure has been reported for pan masala and other products subject to excise, adding to consumers' monthly spending.

Manufacturers continue to say their factory rates have not changed. Regulators are therefore examining the prices and margins added as products move through dealers, distributors and retail outlets. For businesses trying to keep shelves stocked, the immediate problem is both the cost of obtaining goods and whether deliveries arrive at all.

Seasonal demand adds pressure to the market

Diwali and Dashain traditionally bring stronger demand and tighter supplies across the region. That seasonal pressure forms part of the current shortage, particularly for businesses preparing for busy nights and gatherings towards the end of the year.

Manufacturers nevertheless say production lines remain steady and dispatches continue. Bhutan Brewery Private Limited's monthly shipments contrast with repeated accounts of empty shop shelves, directing attention to how stock is allocated and sold after leaving producers.

The Army Welfare Project's shortage of wine at the factory shows that some inventory pressure also exists at the point of production. The market is facing seasonal demand alongside suspected withholding in parts of the distribution chain.

The expected January price rise makes holding inventory attractive to traders seeking a larger return. Selling in mixed sets can also increase receipts by moving less popular goods together with sought after brands. Smaller allocations and set sales leave retailers with fewer choices about what to buy and how much they can offer customers.

Authorities intend the quota and permit system to keep ordinary supplies moving while reducing the incentive to accumulate goods for resale. Retailers say the limits are too tight for demand at the end of the year. Their disagreement centres on whether historical consumption figures adequately match the quantities businesses need during the transition.

Inspectors target prices and hidden stocks

The Competition and Consumer Affairs Authority (CCAA) and the DRC have issued a public notice warning against price gouging and irregular trading. The agencies have pointed to the domestic supply chain as a possible source of increases while manufacturers maintain that factory prices are unchanged.

The price escalations could be originating from domestic distributors or retailers.

A joint inspection and verification team has begun random market checks. Inspectors are looking for inflated prices, hidden inventories and improper sales practices. Their work includes reviewing invoices, comparing retail charges with factory prices and checking whether businesses comply with permits and quotas.

Officials say they have received formal complaints about inflated beer prices and continue to receive consumer calls from several districts. No findings against named businesses or figures for penalties imposed are given in the November 7 account.

Businesses caught hoarding or unfairly raising prices during the transition can face penalties, including suspension of import or distribution permits. Distributors have been instructed to avoid stockpiling, keep products available and refrain from overcharging customers.

The checks combine scrutiny of business records with information from consumers. A receipt, product date or account of a refused order can help inspectors trace where a price increase or supply restriction began. Authorities are encouraging both customers and traders to report suspicious conduct.

Health goals sit behind the tax overhaul

Bhutan's leaders have presented the reform as a public health measure as well as a change in revenue collection. The products they seek to curb include alcohol, tobacco, vapes, electronic cigarettes, doma mixtures and pan masala.

Harmful alcohol use can strain families, contribute to injuries and violence, and is linked to noncommunicable diseases. Higher prices are a widely used way to reduce consumption of harmful products. Policymakers expect health and social costs to fall over time if fewer people drink heavily or smoke.

The levy on pure alcohol also makes strength matter directly to the tax bill. Charging more excise for drinks containing more alcohol is intended to encourage a shift towards products with lower alcohol content. Customs duty on imports and the 5 percent GST form the other parts of the new alcohol tax package.

Authorities are trying to manage the immediate strain of moving from one tax system to another while preserving that longer term health goal. Temporary quotas, restrictions on imports and market inspections are intended to maintain supplies for normal consumption and stop traders exploiting the price gap.

What consumers and retailers can do now

Consumers can help regulators by keeping clear records of purchases and suspicious sales practices. The guidance encourages checking product dates, comparing prices and documenting transactions rather than relying only on a verbal complaint.

• Check manufacturing dates and report suspicious quantities of alcohol produced in 2025 that are sold at sharply higher prices in early 2026.
• Compare displayed prices with receipts, and retain invoices or screenshots showing the seller and amount paid.
• Report forced set sales that require buying less popular products to obtain sought after brands.
• Ask for current factory prices or official retail guidance, and compare prices across outlets.
• Give the CCAA or DRC the product name, date code, seller and price paid when reporting suspected hoarding or overcharging.

Retailers are being advised to follow assigned quotas, avoid unnecessary bulk orders and keep their records in order. Clear price lists and accurate invoices can help customers understand charges and allow inspectors to check transactions.

Businesses should avoid hoarding or bundling products in ways that mislead buyers, sell older inventory first and seek regular, smaller deliveries from distributors. Large purchases made at one time can attract suspicion during a period when authorities are monitoring stock accumulation.

Fair pricing and timely restocking can help preserve customer trust as the new system begins. For shops and bars, the immediate task is to maintain dependable supplies within the temporary limits while preparing for the higher prices expected in January.

The Bottom Line

• Bhutan is experiencing alcohol shortages and rising retail prices ahead of the January 1, 2026 tax change.
• Manufacturers say factory prices remain steady, while some beer cartons now sell for Nu 1,550 to Nu 1,750.
• Bhutan Brewery Private Limited reports dispatching about 300,000 cartons monthly to roughly 50 direct dealers.
• The new structure includes 100 percent customs duty on imports, 5 percent GST and excise of Nu 1,200 per litre of pure alcohol.
• Temporary permits and quotas limit trade, with imports capped through November and a planned pause in December.
• Random inspections are examining prices, inventories, invoices and sales practices. Businesses face penalties, including permit suspension.
• Consumers are encouraged to document suspected overcharging, hoarding and forced set sales, and report them to the CCAA or DRC.
• The reform aims to reduce harmful consumption while authorities manage supply pressures during the transition.