(WSJ) Special Minimart Beers For Foreigners in Bali: alternative option after Ministry Decree and Banning Alcohol Law

12/12/2018

Wall Street Journal, by Sara Schonhardt

Indonesia says it’s sticking by a plan to curb beer sales at small retail shops, but it might ease up on the rules to exempt foreigners on the popular tourist islands of Bali and Lombok.

Trade Minister Rachmat Gobel, under increasing pressure from retailers and industry associations, said cooperatives in heavily touristy areas on Bali and Lombok would be appointed to distribute the beers to designated retailers. The beers would contain labels stating that they are only intended for purchase by foreigners.

Earlier this year the Ministry of Trade issued a decree that will ban the sale of beverages with between 1-5% alcohol content in convenience stores and small shops across the country starting April 16.

The government says the decree is aimed at regulating alcohol sales to prevent underage drinking and protect public morals. But some industry analysts say it’s a sign of the growing influence conservative Islamic groups have over policy making in Indonesia, where the majority of the population is Muslim but many islands and cities have large Christian, Buddhist and Hindu communities. Bali is majority Hindu.

Though beer will still be available for purchase in supermarkets and restaurants, beverage companies and retailers have put up a fuss, saying the ban will have a significant impact on sales and could deter investors and tourists at a time when the government is looking to them to boost economic growth.

“We’ve faced a lot of complaints from the industry, especially the beer industry, because they’ve experienced a drop in sales for some months,” said Hariyadi Sukamdani, chairman of the Employers’ Association of Indonesia. Retailers have been told to phase out beer stocks from their shops since January.

He estimated a loss in sales of up to 700 billion rupiah ($53.8 million) in recent months, calling it “significant.” Shinta Kamdani, the association’s chair for international affairs, said revenue losses could amount to 2.5 trillion rupiah for all of 2015.

“We have to understand that if we minimize the availability of distribution, this is going to cause other problems,” Ms. Kamdani said.

In addition to the minimart chains and convenience stores, around 55,000 traditional mom and pop retailers are likely to be impacted by the decree, say industry analysts.

“Excessive regulation leads to unintended consequences” around trade, illicit alcohol and retail sales, “and that’s not in anyone’s interest, said Wilson DelSocorro, corporate relations director for Southeast Asia at Diageo, an alcoholic beverage company that handles distribution for Guinness in Indonesia.

He estimates that up to half of the 5 trillion rupiah the government collects each year in tax revenue on alcohol sales could also be affected by the ban. “It’s not a small piece of change for the market,” he says.

A rise in sales of illicit alcohol are one worry, said Mr. DelSocorro. Another is the message the ban will send about regulatory uncertainty in a country that has established a reputation for policy flip-flops.

“I think the legal uncertainty – that the government can just turn around a regulation like this – that’s a blow to business confidence,” he said.

The ministry of trade has its reasons why this needs to be enacted immediately, said Ms. Kamdani. “But we have to be careful not to rush into implementation.”

The employers association is asking the government to conduct an evaluation of the impact the ban will have both financially and socially. Diageo is asking for consultation to find ways to mitigate underage drinking.

Mr. Gobel, meanwhile, said the proposal to restrict sales to foreigners in Bali and Lombok was not an exception to the decree. The ministry has no plan to introduce it in other tourist destinations such as Yogyakarta and Batam, he added.

“Please don’t think that because we control alcoholic beverage distribution the number of foreign tourists will drop,” said Mr. Gobel, seeking to address concerns about the impact the ban would have on tourism. “They don’t come here not to consume alcoholic drinks but because they want to the natural beauty of our country and our culture.”

on April 13, DPR create Working Committee (Panja/Panitia Kerja) for banning alcohol law. One from 39 Indonesia 2015 priority legislation (Prolegnas 2015) includes to banning alcohol (RUU Larangan Minuman Beralkohol/RUU LMB).

other coverage about liquor banned:

http://wikidpr.org/news/wikidpr-pertegas-peraturan-menteri-tentang-pembatasan-miras-baleg-dpr-percepat-bahas-ruu-lmb

http://wikidpr.org/news/bloomberg-jakarta-post-beer-today-gone-tomorrow-2015-priority-legislation-includes-banning-alcohol

http://chirpstory.com/li/261154

origin source: http://blogs.wsj.com/indonesiarealtime/2015/04/13/minimart-beers-for-bali-perhaps-if-youre-a-foreigner/

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(WSJ) Special Minimart Beers For Foreigners in Bali: alternative option after Ministry Decree and Banning Alcohol Law