Alcohol sticker project rouses cries of monopoly INDONESIA
THE Indonesian Government is planning to impose tighter controls on the distribution of alcohol, possibly handing control of a $150 million monopoly to a new company which plans to oversee all distribution.
The Health Minister, Mr Sujudi, said at the weekend that the sale of alcohol would be restricted to places like hotels and duty-free shops in a move to limit consumption.
His comments came amid a debate over a proposal by a private company to supervise alcohol distribution through a system of special stickers which would be sold to domestic producers and importers. The domestic alcohol industry has publicly opposed the sticker plan from a new company, PT Arbamass Multi Invesco, which is substantially owned by Mr Ari Sigit Soeharto, the 24-year-old grandson of Indonesia's president.
Alcohol is already subject to total taxes of more than 200 per cent in some cases but there has been renewed pressure in the past year from the country's Muslim religious leaders to further restrict distribution.
Last year there was a crackdown on illegal production of cheap local products, but Mr Sujudi is now suggesting that legal production will also be curtailed.
Industry sources say that that the import system - which still involves considerable smuggling - has also been in turmoil recently because of competition among private interests to co-operate with the two approved State-owned import firms.
PT Arbamass was established early last year after government officials indicated that tighter controls were planned. It has a licence to distribute alcohol and reportedly other business interests.
The company's president director, Mr Emir Baramuli, now claims it has been given approval to place stickers on all containers of alcohol before they are sold in an effort to help government officials monitor distribution.
The plan is to place stickers with a value of 600 to 750 rupiah (37c to 46c) on each container depending on the alcohol content and for PT Arbamass to keep a proportion of the total revenue which could be about $150 million. Mr Baramuli has denied his company is trying to establish a new monopoly and says it is just responding to the government policy of reducing alcohol consumption to protect young Indonesians.
But domestic producers have strongly criticised the move as the creation of a monopoly which should not be placed in private hands.
The Jakarta Post quoted one unnamed local producer saying: "Arbamass has such a strong political connection, and I fear they will have their way although this rent-seeking move is obviously unfair." Mr Baramuli has responded that Arbamass does not want to actually distribute alcohol but just co-operate with the relevant supervisory agencies. "We are the extended arm of the Government, but to control something we must be wise and firm," he said.
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