Kathmandu-Gorkha Brewery, which already holds nearly two-thirds of the beer market, has created an illegal monopoly by merging Raj Brewery into itself.

Section 5 of the Competition Promotion and Market Protection Act 2007 clearly states that a merger resulting in a market share exceeding 40 percent is deemed to restrict competition and is not permitted.

However, with the apparent collusion of the Department of Industry, Gorkha Brewery, which already controls 57 to 60 percent of the market, was allowed to acquire Raj Brewery. This raises serious questions about the rule of law.

According to excise duty data for fiscal year 2023 to 2024, Gorkha Brewery paid Rs 17.72 billion in taxes, significantly higher than its competitors. CG Brewery paid Rs 5.07 billion, Yeti Brewery paid Rs 4.06 billion, and Tiger Brewery paid Rs 1.16 billion. Raj Brewery, on the other hand, paid only Rs 647.9 million during the same period.

The government has halted new liquor industry licenses for the past 13 years, effectively protecting a cartel of large companies and weakening fair competition in the market. The merger, based solely on declared production capacity, is expected to push Gorkha Brewery’s market share to 70 percent, consolidating its dominance over consumers.

Although there is a provision to impose a fine of Rs 500,000 for violations, regulators appear silent as major players move to capture a market worth billions.
Gorkha Brewery acquiring Raj Brewery : Plotting an illegal market monopoly