Domestic beer sales on the rise
Domestic beer sales on the rise
The Jakarta Post, Jakarta
After three straight years of decline, brewer PT Multi Bintang
Indonesia's (MBI) domestic beer sales grew last year by 18
percent to 110 million liters.
MBI's sales mirrored the 18 percent growth in the overall
domestic beer market, which totaled 160 million liters, up from
135 million liters in 2003.
"We were not expecting this growth at all. It was quite
surprising," said MBI president director Michiel Egeler, whose
company is the market leader in beer sales, holding about two
thirds of the domestic market.
Egeler, whose company sells products under the Bir Bintang,
Bintang Zero, Heineken, Guinness and Green Sands brands, said
that the strong growth came on the heels of increased consumer
confidence and improved purchasing power resulting from the
economy's strong performance.
"In past years people were not optimistic and since
beer is a luxury product in Indonesia, sales largely depended on
the consumer's level of disposable income," explained Egeler.
He said that there was still room to grow as Indonesia's per
capita beer consumption was still around 0.6 liters per year, as
compared to Malaysia's 8 liters per year and the Netherland's 80
liters per year.
"Our projection is that the overall beer market will grow by 3
percent this year," said Egeler.
He explained that growth would be significantly less than last
year due to factors such as inflation and the gradual removal of
fuel subsidies, which has led to a decline in disposable incomes.
However, he warned that sales would significantly decline if
the government decided to increase the excise duty of Rp 2,300
per liter and 40 percent luxury tax imposed on beer.
Egeler added that aside from the weak economic growth in past
years, the government's decision in 2001 to increase excise duty
was a significant factor that led to the decline of beer sales
from 170 million liters in 2001 to 135 million in 2003.
"The market has only begun to recover from the previous excise
duty increase," said Egeler, whose company's beer sales
contributed Rp 687 billion to government revenue last year.
"We hope the government doesn't increase it this year as it
would be counterproductive." (002)