Alcohol in Indonesia: Sale of Alcohol in Minimarkets Banned
Indonesian Trade Minister Rachmat Gobel confirmed that the ban on sales of alcohol in minimarkets and kiosks will continue after 16 April 2015. This ban, stipulated by Minister of Trade Regulation No. 06/M-DAG/PER/1/2015 on the Control and Supervision of Procurement, Distribution, and Sale of Alcoholic Beverages (which was signed by the minister on 16 January 2015), prohibits the sale of beverages with an alcohol content ranging between 1 to 5 percent (referred to as type A alcoholic drinks) in minimarkets and kiosks.
Sales of drinks that have an alcohol content higher than five percent had already been banned from being sold in minimarkets and kiosks. These beverages (and from now on also the Type A alcoholic drinks) can only be bought in the (licensed) supermarkets and hypermarkets. The government introduced this ban in an effort to “protect the morals and culture of Indonesian society”. Due to the high number of minimarkets and kiosks in Indonesia it is easy for schoolchildren or students to buy light alcoholic drinks at stores located close to their schools. Moreover, there already exists a negative attitude towards alcohol in Muslim-majority Indonesia as consumption of intoxicants (specifically alcoholic drinks) is generally forbidden in the Qur'an. However, as there are millions of nominal Muslims living in Indonesia, beer consumption has risen in recent years and for many has become part of the urban lifestyle.
The above-mentioned Trade Regulation basically means that people cannot purchase beer, breezers, and other light alcoholic drinks anymore in the 7-Eleven, Circle K, Indomaret and Alfamart minimarkets which are scattered across the bigger cities of Indonesia. After the Regulation had come into effect in January, these minimarkets and kiosks were given a three-month period to get rid of existing stocks. As such, starting from 16 April 2015 the sale of alcoholic beverages is banned altogether in all Indonesian minimarkets and kiosks.
Besides the purchase of alcoholic beverages in supermarkets and hypermarkets, it is also still possible to buy these drinks in Indonesian cafés and restaurants. However, this is relatively expensive as current regulations stipulate that these sellers are required to pay an additional 10 percent value added tax (VAT), on top of the standard 11 percent service charge. In 2014, the Indonesian government collected IDR 6.1 trillion (USD $469 million) from the excise tax on alcoholic drinks.
Objection to the ban primarily came from areas that attract many foreign tourists, such as Bali. Tutum Rahanta, Deputy Chairman of the Indonesian Retail Business Association (Aprindo), stated earlier this year that the ban could disturb Indonesia’s tourism sector. Although in general minimarkets only account for 1 or 2 percent of total beer sales, in certain tourist destinations in Indonesia this figure goes up to 20 percent. Moreover, Rahanta claims that the ban will boost illegal alcoholic beverage distribution.