Liquor producers against obligatory labeling move
Liquor producers against obligatory labeling move
By Hidayat Jati
JAKARTA (JP): Liquor producers say they are opposing a move by
a private firm trying to control the industry through compulsory
labeling.
"We have doubts with the legality of their claim that a
private firm can exercise some control over this industry instead
of the relevant government agencies," Hatta Arpan, chairman of
the Association of Alcoholic Beverage Producers, told The Jakarta
Post here yesterday.
"We will not pay anything to that firm until we resolve the
legality issue," he said.
Hatta was reacting to a news report which stated that PT
Arbamass Multi Invesco had been given the authority to supervise
the distribution of alcoholic beverages throughout the mainly
Moslem-populated Indonesia.
"We were never officially consulted or notified by the
government or Arbamass about this plan," Hatta said.
Emir Baramuli, an executive of Arbamass, was quoted by Kompas
yesterday as saying that the supervision will be conducted
through the sales of stickers which the firm will sell to
beverage producers.
Without the stickers, no alcoholic drinks can be sold or
distributed legally, said Emir, who is son of Golkar legislator
Arnold Baramuli.
Arbamass, which has several subsidiaries in different
industries, is also partly owned by Ari Sigit Soeharto, a son of
industrialist Sigit Hardjojudanto.
Emir said the prices of the stickers will depend on the
alcoholic content of the beverages. For drinks with less than
five percent alcohol, the sticker will cost Rp 600 (around 27
U.S. cents) per bottle/can, and the sticker will cost Rp 750 for
those with alcohol content of five percent to 55 percent.
Emir did not explain how exactly the stickers could be used a
means to supervise distribution.
He also claimed that Arbamass already controlled distribution
in West Kalimantan, Irian Jaya, South Sulawesi and Bali.
Hatta denied this and said that Emir's claim was only true in
the case of West Kalimantan.
Strict
In Indonesia, it is legal to produce, sell and consume
alcoholic drinks. The industry, however, is strictly regulated
and heavily taxed.
The government stipulates that imports of liquor can only be
carried out by two firms, PT Rajawali Garuda Nusantara and PT
Tjipta Niaga.
In practice, the distribution is supervised by the Indonesian
Hotel and Restaurants Association, which allocates the products
strictly among its members. The distribution is conducted by
several leading grocers, including PT Hero Mini Supermarket and
PT Tebet Indraya Supermarket.
Imports of liquor are also subject to high duties -- 40
percent on beer and 170 percent on wine, brandy, whisky and gin
-- while domestic sales are subject to a 35 percent luxury tax on
top of a 10 percent value added tax.
Emir said that his firm, which has no previous experience in
beverage distribution, was given a permit by the Directorate
General of Local Autonomy Administration of the Ministry of Home
Affairs on Feb. 19, 1994.
He also said Arbamass gained the permit because current
regulations "are not synchronized".
Meanwhile, Hatta, who flatly rejected the claim that the
existing mechanism has failed to supervise the liquor trade, said
yesterday that the Ministry of Home Affairs is not the
appropriate agency to issue such a license.
"We usually answer all government inquiries to the Ministry of
Health, Ministry of Trade, Ministry of Industry and the National
Police when that is required," he said.
Despite Hatta's apparent determination to oppose Arbamass'
move, one executive of a leading liquor producer expressed his
skepticism.
"Arbamass has such a strong political connection, and I fear
they will have their way although this rent-seeking move is
obviously unfair," said the executive, who requested anonymity.
"I know cases of some regional distributors, who rejected the
company's offer, suddenly finding themselves under police
investigation," he added.
The executive also expected that after Arbamass got what it
wanted, prices of liquor would soar, which would push sales down,
especially in the case of beer.