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Indonesia: Beer Sales Ban for Small Vendors

(Apr. 23, 2015) In January 2015, Indonesia’s Ministry of Trade issued Regulation 6/M-Dag/PER/1/2015, which bans the sale by small shops of drinks with an alcohol content of 1% to 5%. (Perubahan Kedua Atas Peraturan Perdagangan No. 20/M-DAG/PER/4/2014 Tentang Pengendalian Dan Pengawasan Terhadap Pengadaan, Peredaran, dan Penjualan Minuman Beralkohol [Second Amendment to Regulation No. 20/M-DAG/PER/4/2014 on the Control and Supervision of Procurement, Distribution, and Sale of Alcoholic Beverages] (Jan. 16, 2015), JARINGAN DOKUMENTASI DAN INFORMASI HUKUM [NETWORK DOCUMENTATION AND LEGAL INFORMATION], Ministry of Trade website.)

Rules are already in place forbidding these vendors from selling drinks with higher alcohol content. This regulation thus covers beer and mixed beverages containing a combination of alcohol and soft drinks; it will not apply to supermarkets or to sales by hotels, restaurants, and bars. (Indonesia Bans Sale of Beer in Small Shops, GUARDIAN (Apr. 16, 2015); Alcohol in Indonesia: Sale of Alcohol in Minimarkets Banned, INDONESIA-INVESTMENTS (Apr. 10, 2015); Kementerian Perdagangan Larang Bir di Minimarket [Ministry of Trade Bans Beer in Minimarkets], BBC INDONESIA (Jan. 29, 2015).)

The regulation allowed a three-month period for vendors to sell off their existing stocks. On April 16, 2015, the ban came into full effect. (Alcohol in Indonesia: Sale of Alcohol in Minimarkets Banned, supra.)

Possible Exceptions to the Ban

There has been considerable concern about the effect of the ban on businesses in popular tourist areas, such as Bali. While the majority of people in Indonesia are followers of Islam, which forbids the consumption of alcoholic beverages, Bali is a Hindu-majority island. Rachmat Gobel, the Minister of Trade, who met a hostile reception at a meeting on the issue in Bali, promised that an exception would be made for the tourist-dependent area, so that beach vendors would still be able to sell beer. (Indonesia Bans Sale of Beer in Small Shops, supra.)

According to Sinar Pohan, a legal affairs official of the Ministry of Trade, a ministerial guideline stipulates that local elected officials can designate particular places in which alcoholic beverages may be sold by small stores. “These areas or places should be declared as tourism areas or tourism sites through a bylaw,” Pohan said. (Ni Komang Erviani, Bali Tourist Areas Exempt from Beer Ban, JAKARTA POST (Apr. 17, 2015).)

Responses to the Ban

While Indonesia has a lower rate of alcohol consumption than other countries in Southeast Asia, concern was expressed by the Ministry about the effects of drinking. The founder of the National Anti-Alcohol Movement, Fahira Idris, who favors the new restriction, described alcohol as a “machine killing our youth.” (Indonesia Bans Sale of Beer in Small Shops, supra.)

The Association of Indonesian Retailers has taken a different view, stating that regional administrations should have full authority over sales of beverages with low alcohol content. (Ni Koman Erviani, supra.) Beer brewers and distributors are also unhappy with the regulation. The Indonesian Brewers Association has said that the new rules essentially ban sales of beer in small towns that do not have supermarkets. (Indonesia Bans Sale of Beer in Small Shops, supra.) The retailers’ association noted that while nationally only 1-2% of beer sales occur in minimarkets, in some tourist areas those vendors sell 10-20% of the beer consumed. (Ni Koman Erviani, supra.)