Leading brewers reject move to control industry
Leading brewers reject move to control industry
JAKARTA (JP): Indonesia's leading brewers, including those
which are publicly listed and partly foreign-owned, declared
their opposition yesterday to a private firm's attempt to control
the liquor industry through compulsory labeling.
"If the government allows this private firm to control the
liquor and beer distribution, it will create a monopoly and a
high-cost economy," said Rubian Harahap, an executive of the Beer
Group of the Association of Beverage Industries (Asrim) at a news
conference.
The association was reacting to recent news stories reporting
the attempts of PT Arbamass Multi Invesco to control the liquor
industry by forcing producers, distributors and importers to
purchase the firm's stickers prior to sale.
"Moreover, we think the move contradicts all existing laws and
regulations," added Harahap, concurrently the commerce director
of the publicly listed PT Delta Jakarta, the maker of Anker Beer.
Arbamass, controlled by the politically-connected businessmen
Emir Baramuli and Ari Sigit Soeharto, has claimed that the
compulsory labeling move will protect the country's younger
generation from the bad influence of alcohol and increase the
levy revenues of provincial administrations.
Arbamass also said that it was given the authority to enforce
the labeling system throughout the mainly Moslem-populated
Indonesia by the Director General of Regional Autonomy of Home
Affairs Ministry last year.
Press reports earlier indicated, however, the dubious status
of the permit, which was given to Arbamass executives two months
before the firm was actually incorporated.
A copy of the actual permit also shows that the document is
nothing more than a circular letter from the director general of
regional autonomy to provincial authorities reminding them of the
need to control the distribution of alcoholic beverages in their
respective areas.
Arbamass was not mentioned at all in the circular letter.
Harahap, who said that he has contacted the trade, health, and
industry ministries, said yesterday that his association will not
purchase any Arbamass stickers until the government resolves the
issue.
The labeling move was opposed last month by the Association of
Alcoholic Beverage Producers (Aspromia), which also called
Arbamass' planned move "illegal and monopolistic".
Both associations stated that the prices of each Arbamass
sticker is about 150 percent higher than the normal regional
levies on liquor which range between Rp 100 (about six U.S.
cents) and Rp 150 per bottle and can.
Beer
The planned sticker move would have a serious impact on the
beer industry as beer is by far the best selling alcoholic drink
in the country.
Harahap said that PT Delta alone, which is partly-owned by the
Jakarta Municipal Authority and San Miguel Malaysia, recorded Rp
114.68 billion in sales in 1993.
Another major brewer, the publicly listed PT Multi Bintang
Indonesia, is 75.9 percent controlled by Heineken International
Bier B.V of the Netherlands.
Rene Hooft Graafland, Multi Bintang's president, said that
other foreign investors, including those who are now planning to
invest in Indonesia, are watching the development of the Arbamass
move because it reflects on the country's legal certainty.
Harahap also warned that if the compulsory sticker move is
enforced, brewers will have to raise the prices of their products
by 40 percent, which would be detrimental to sales considering
the highly-elastic demand.
In a related development, Antara reported from Surabaya that
the East Java administration had hired Arbamass as a "consultant"
to control the trade of all types of processed food and drinks.
Deputy Governor Harwin Wasisto was quoted as saying that the
move is intended to control and limit the trading of food and
drinks which have passed their expiration dates. (hdj)