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)