Sri Lanka will allow Lion Brewery franchise holder or Carlsberg in the country and Lion Beer imports at lower duty, following flood damage to its production facilities in Colombo, a report said.

Sri Lanka’s The Sunday Times newspaper said customs duty for beer with alcohol of less than 5 percent has been cut to Rs129 per litre from Rs500 and for beer with over 5 percent alcohol to Rs246 from Rs500.

Lion Beer has said that it had arranged with Carlsberg group breweries to produce its stuff.

Due to high tax protection, Sri Lanka does not import a large volume of beer. Alcohol and cigarettes are also import tax protected allowing large near monopolies to emerge.

With imports going up, government import duty revenues can go up over the next few months. The newspaper said about 5 million litres of beer could be imported under the concession. The concession appeared to be exclusively given to the firm, the newspaper said.

Beer also draws high excise duties, regardless of whether it is imported or not, with beer drinkers among top taxpayers in the country, along with cigarette smokers.

Last year, customers of Ceylon Beverage Holdings group paid Rs20.2 billion in excises and the firm paid Rs938 million in income taxes.