Tue, 11 Aug 2015
From: Reuters
JAKARTA: A steep increase in Indonesia’s import tariffs on wine and spirits could more than double prices that were sky-high already, denting demand and raising the risk of smuggling, drinks industry executives say.

Under new tariffs that came into effect on July 23, importers have to pay 90 percent on the value of wine and 150 percent on spirits. Importers previously paid a fixed amount per liter.

The new ruling is the latest blow to a $300 million industry already reeling from an April ban on alcohol sales at minimarts. Two Islamic parties have also proposed legislation to ban consumption of alcohol in the country with the world’s largest Muslim population.

“It’s quite a shock to the industry,” Dendy Borman, a board member at the International Spirit and Wine Association, told Reuters in a phone interview.

Foreign companies that sell wine and spirits in Indonesia include Diageo Plc, Pernod Ricard, Remy Cointreau and Bacardi & Co.

Prices for wine and spirits in Indonesia had already surged by 140.5 percent and 154.4 percent, respectively, from 2009 to 2014, partly due to the weakening rupiah, according to market research firm Euromonitor International.

A 750-ml bottle of Absolut vodka imported before the tariff hike was selling at Jakarta supermarkets last week for at least 700,000 rupiah ($51.71) compared with about S$70 ($50.54) in Singapore and $18 in Chicago.

Retail prices for imported wine and spirits will now rise further, in a range from 15 percent to more than 100 percent, the association’s Borman said.

“Such high prices for imported brands might give incentive for some actors to fill in the gap by producing fake liquor at very cheap prices,” he said.

“Self- destructive”

Critics say that if the increase in tariffs on alcoholic drinks and a raft of other products was designed to protect the local industry, it makes little sense because Indonesian-made goods cannot directly compete with the higher-quality imports.

“Addressing economic decline by limiting imports is self-destructive and will be detrimental for the future as exports depend on imports,” said Jakob Friis Sorensen, former chairman of the European Business Chamber of Commerce in Indonesia.

“Right now what Indonesia needs are clear and simple rules around trade, not further restrictions.”

Coordinating Minister of Economics Sofyan Djalil said the cost increases for alcohol would not be as much as the new tariffs suggested because the hike was accompanied by the removal of quotas.

“We believe that excessive consumption of alcohol is not good for the country, for the society,” Djalil told Reuters on Friday. “But because we remove the quota, the rent that was captured by a quota holder is simply not there anymore.”

Still, businesses will have no choice but to eventually pass on the increased costs to consumers, said Ramon Meijer, general manager at the Lan Na Thai bar and restaurant in Jakarta, where wine and spirits make up around 40 percent of monthly sales.

“For us the costs are too difficult to bear,” Meijer said.





News Search/Filter
Transaction Rates
23 Oct 18
Buy
Sell
AED1
4,145.72
4,145.72
AFN1
200.63
200.63
ALL1
139.96
139.96
AMD1
31.42
31.42
ANG1
8,580.91
8,580.91
AOA1
50.01
50.01
ARS1
417.74
417.74
AUD1
10,769.32
10,769.32
AWG1
8,460.00
8,460.00
AZN1
8,944.48
8,944.48
BAM1
8,957.25
8,957.25
BBD1
7,613.99
7,613.99
BDT1
180.10
180.10
BGN1
8,919.09
8,919.09
BHD1
40,384.05
40,384.05
BIF1
8.50
8.50
BMD1
15,227.98
15,227.98
BND1
10,798.19
10,798.19
BOB1
2,203.42
2,203.42
BRL1
4,131.63
4,131.63
BSD1
15,227.98
15,227.98
BTC1
97,615,974
97,615,974
BTN1
207.29
207.29
BWP1
1,429.78
1,429.78
BYN1
7,258.08
7,258.08
BZD1
7,577.37
7,577.37
CAD1
11,625.05
11,625.05
CDF1
9.36
9.36
CHF1
15,286.35
15,286.35
CLF1
607,951.93
607,951.93
CLP1
22.31
22.31
CNH1
2,193.00
2,193.00
CNY1
2,191.86
2,191.86
COP1
4.93
4.93
CRC1
25.68
25.68
CUC1
15,227.98
15,227.98
CUP1
591.37
591.37
CVE1
157.80
157.80
CZK1
676.18
676.18
DJF1
85.55
85.55
DKK1
2,340.04
2,340.04
DOP1
304.50
304.50
DZD1
128.24
128.24
EGP1
850.29
850.29
ERN1
1,015.34
1,015.34
ETB1
546.12
546.12
EUR1
17,458.47
17,458.47
FJD1
7,076.17
7,076.17
FKP1
19,743.54
19,743.54
GBP1
19,743.54
19,743.54
GEL1
6,223.14
6,223.14
GGP1
19,743.54
19,743.54
GHS1
3,147.29
3,147.29
GIP1
19,743.54
19,743.54
GMD1
308.25
308.25
GNF1
1.67
1.67
GTQ1
1,962.77
1,962.77
GYD1
72.85
72.85
HKD1
1,942.43
1,942.43
HNL1
631.92
631.92
HRK1
2,348.98
2,348.98
HTG1
213.58
213.58
HUF1
54.07
54.07
IDR1
1.00
1.00
ILS1
4,158.11
4,158.11
IMP1
19,743.54
19,743.54
INR1
206.61
206.61
IQD1
12.77
12.77
IRR1
0.35
0.35
ISK1
128.95
128.95
JEP1
19,743.54
19,743.54
JMD1
116.77
116.77
JOD1
21,462.97
21,462.97
JPY1
135.04
135.04
KES1
150.62
150.62
KGS1
222.19
222.19
KHR1
3.73
3.73
KMF1
35.46
35.46
KPW1
16.91
16.91
KRW1
13.44
13.44
KWD1
50,192.58
50,192.58
KYD1
18,275.51
18,275.51
KZT1
41.76
41.76
LAK1
1.78
1.78
LBP1
10.06
10.06
LKR1
88.23
88.23
LRD1
96.90
96.90
LSL1
1,063.21
1,063.21
LYD1
11,016.27
11,016.27
MAD1
1,603.85
1,603.85
MDL1
893.87
893.87
MGA1
4.34
4.34
MKD1
284.05
284.05
MMK1
9.61
9.61
MNT1
6.11
6.11
MOP1
1,886.25
1,886.25
MRO1
42.65
42.65
MRU1
422.99
422.99
MUR1
440.66
440.66
MVR1
985.62
985.62
MWK1
20.94
20.94
MXN1
784.65
784.65
MYR1
3,661.01
3,661.01
MZN1
251.22
251.22
NAD1
1,063.02
1,063.02
NGN1
41.88
41.88
NIO1
474.11
474.11
NOK1
1,845.05
1,845.05
NPR1
129.56
129.56
NZD1
9,980.41
9,980.41
OMR1
39,554.22
39,554.22
PAB1
15,227.98
15,227.98
PEN1
4,567.45
4,567.45
PGK1
4,545.21
4,545.21
PHP1
282.80
282.80
PKR1
114.54
114.54
PLN1
4,066.76
4,066.76
PYG1
2.54
2.54
QAR1
4,182.26
4,182.26
RON1
3,741.80
3,741.80
RSD1
147.38
147.38
RUB1
233.56
233.56
RWF1
17.29
17.29
SAR1
4,058.46
4,058.46
SBD1
1,917.81
1,917.81
SCR1
1,118.88
1,118.88
SDG1
323.16
323.16
SEK1
1,691.99
1,691.99
SGD1
11,031.81
11,031.81
SHP1
19,743.54
19,743.54
SLL1
1.81
1.81
SOS1
26.29
26.29
SRD1
2,041.83
2,041.83
SSP1
116.90
116.90
STD1
0.72
0.72
STN1
710.42
710.42
SVC1
1,740.55
1,740.55
SYP1
29.56
29.56
SZL1
1,063.83
1,063.83
THB1
464.01
464.01
TJS1
1,616.13
1,616.13
TMT1
4,338.48
4,338.48
TND1
5,326.13
5,326.13
TOP1
6,603.94
6,603.94
TRY1
2,687.17
2,687.17
TTD1
2,259.50
2,259.50
TWD1
493.45
493.45
TZS1
6.64
6.64
UAH1
542.20
542.20
UGX1
4.05
4.05
USD1
15,227.98
15,227.98
UYU1
462.89
462.89
UZS1
1.85
1.85
VEF1
0.06
0.06
VND1
0.65
0.65
VUV1
136.99
136.99
WST1
5,812.92
5,812.92
XAF1
26.61
26.61
XAG1
221,787.48
221,787.48
XAU1
18,613,381.89
18,613,381.89
XCD1
5,634.67
5,634.67
XDR1
21,237.22
21,237.22
XOF1
26.61
26.61
XPD1
17,082,642.49
17,082,642.49
XPF1
146.30
146.30
XPT1
12,509,636.07
12,509,636.07
YER1
60.82
60.82
ZAR1
1,062.66
1,062.66
ZMW1
1,301.70
1,301.70
ZWL1
47.23
47.23
Taxation Exchange Rates
31 Aug 16 - 06 Sep 16
USD 1
13,232.00
AUD 1
10,043.30
CAD 1
10,213.70
DKK 1
1,999.40
HKD 1
1,706.22
MYR 1
3,283.28
NZD 1
9,623.63
NOK 1
1,605.23
GBP 1
17,433.70
SGD 1
9,757.68
SEK 1
1,569.45
CHF 1
13,631.10
JPY 100
13,101.00
MMK 1
11.01
INR 1
197.29
KWD 1
43,920.70
PKR 1
126.23
PHP 1
285.00
SAR 1
3,528.53
LKR 1
91.12
THB 1
382.08
BND 1
9,756.53
EUR 1
14,885.50
CNY 1
1,987.61

Okusi Associates: Indonesian Business & Management Services