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
18 Nov 18
Buy
Sell
AED1
3,977.85
3,977.85
AFN1
193.47
193.47
ALL1
134.02
134.02
AMD1
30.36
30.36
ANG1
8,297.83
8,297.83
AOA1
47.08
47.08
ARS1
408.63
408.63
AUD1
10,718.84
10,718.84
AWG1
8,115.14
8,115.14
AZN1
8,582.29
8,582.29
BAM1
8,531.97
8,531.97
BBD1
7,305.68
7,305.68
BDT1
175.79
175.79
BGN1
8,531.81
8,531.81
BHD1
39,070.41
39,070.41
BIF1
8.26
8.26
BMD1
14,611.36
14,611.36
BND1
10,700.25
10,700.25
BOB1
2,131.43
2,131.43
BRL1
3,903.12
3,903.12
BSD1
14,611.36
14,611.36
BTC1
80,859,465
80,859,465
BTN1
204.87
204.87
BWP1
1,378.53
1,378.53
BYN1
6,971.21
6,971.21
BZD1
7,306.94
7,306.94
CAD1
11,113.39
11,113.39
CDF1
8.96
8.96
CHF1
14,621.81
14,621.81
CLF1
624,951.24
624,951.24
CLP1
21.82
21.82
CNH1
2,111.35
2,111.35
CNY1
2,105.99
2,105.99
COP1
4.61
4.61
CRC1
24.26
24.26
CUC1
14,611.36
14,611.36
CUP1
567.43
567.43
CVE1
150.18
150.18
CZK1
641.94
641.94
DJF1
82.07
82.07
DKK1
2,235.97
2,235.97
DOP1
293.22
293.22
DZD1
123.66
123.66
EGP1
822.34
822.34
ERN1
974.26
974.26
ETB1
527.54
527.54
EUR1
16,683.44
16,683.44
FJD1
6,934.35
6,934.35
FKP1
18,760.89
18,760.89
GBP1
18,760.89
18,760.89
GEL1
5,971.15
5,971.15
GGP1
18,760.89
18,760.89
GHS1
3,054.08
3,054.08
GIP1
18,760.89
18,760.89
GMD1
294.55
294.55
GNF1
1.62
1.62
GTQ1
1,909.06
1,909.06
GYD1
70.42
70.42
HKD1
1,866.23
1,866.23
HNL1
608.80
608.80
HRK1
2,245.93
2,245.93
HTG1
203.14
203.14
HUF1
51.86
51.86
IDR1
1.00
1.00
ILS1
3,944.21
3,944.21
IMP1
18,760.89
18,760.89
INR1
202.98
202.98
IQD1
12.34
12.34
IRR1
0.34
0.34
ISK1
119.14
119.14
JEP1
18,760.89
18,760.89
JMD1
116.95
116.95
JOD1
20,593.76
20,593.76
JPY1
129.50
129.50
KES1
142.98
142.98
KGS1
212.66
212.66
KHR1
3.64
3.64
KMF1
33.85
33.85
KPW1
16.23
16.23
KRW1
13.02
13.02
KWD1
48,396.08
48,396.08
KYD1
17,673.16
17,673.16
KZT1
39.84
39.84
LAK1
1.72
1.72
LBP1
9.73
9.73
LKR1
83.33
83.33
LRD1
92.40
92.40
LSL1
1,035.81
1,035.81
LYD1
10,551.98
10,551.98
MAD1
1,541.67
1,541.67
MDL1
857.46
857.46
MGA1
4.05
4.05
MKD1
271.16
271.16
MMK1
9.19
9.19
MNT1
5.86
5.86
MOP1
1,825.73
1,825.73
MRO1
40.92
40.92
MRU1
398.89
398.89
MUR1
420.71
420.71
MVR1
945.10
945.10
MWK1
20.18
20.18
MXN1
724.73
724.73
MYR1
3,489.04
3,489.04
MZN1
241.73
241.73
NAD1
1,035.81
1,035.81
NGN1
40.08
40.08
NIO1
455.43
455.43
NOK1
1,731.44
1,731.44
NPR1
128.04
128.04
NZD1
10,047.35
10,047.35
OMR1
37,957.59
37,957.59
PAB1
14,611.36
14,611.36
PEN1
4,354.25
4,354.25
PGK1
4,371.46
4,371.46
PHP1
277.93
277.93
PKR1
109.55
109.55
PLN1
3,866.10
3,866.10
PYG1
2.48
2.48
QAR1
4,044.49
4,044.49
RON1
3,575.56
3,575.56
RSD1
141.09
141.09
RUB1
221.43
221.43
RWF1
16.56
16.56
SAR1
3,894.33
3,894.33
SBD1
1,825.38
1,825.38
SCR1
1,068.98
1,068.98
SDG1
309.34
309.34
SEK1
1,622.37
1,622.37
SGD1
10,647.36
10,647.36
SHP1
18,760.89
18,760.89
SLL1
1.74
1.74
SOS1
25.46
25.46
SRD1
1,959.15
1,959.15
SSP1
112.16
112.16
STD1
0.69
0.69
STN1
674.88
674.88
SVC1
1,683.14
1,683.14
SYP1
28.37
28.37
SZL1
1,035.81
1,035.81
THB1
444.85
444.85
TJS1
1,563.04
1,563.04
TMT1
4,162.80
4,162.80
TND1
5,054.06
5,054.06
TOP1
6,377.60
6,377.60
TRY1
2,740.36
2,740.36
TTD1
2,185.19
2,185.19
TWD1
476.56
476.56
TZS1
6.37
6.37
UAH1
530.57
530.57
UGX1
3.94
3.94
USD1
14,611.36
14,611.36
UYU1
449.79
449.79
UZS1
1.77
1.77
VEF1
0.05
0.05
VND1
0.63
0.63
VUV1
132.60
132.60
WST1
5,594.99
5,594.99
XAF1
25.43
25.43
XAG1
210,513.09
210,513.09
XAU1
17,844,846.11
17,844,846.11
XCD1
5,406.10
5,406.10
XDR1
20,297.81
20,297.81
XOF1
25.43
25.43
XPD1
17,195,499.69
17,195,499.69
XPF1
139.80
139.80
XPT1
12,368,358.23
12,368,358.23
YER1
58.36
58.36
ZAR1
1,041.95
1,041.95
ZMW1
1,243.42
1,243.42
ZWL1
45.32
45.32
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