Indonesia: PT Multi Bintang Indonesia in talks with government over new ban on alcohol sales in minimarts

PT Multi Bintang Indonesia Tbk is in talks with the government over a new ban on alcohol sales at minimarts and a planned 40 million euros (RM155 million) investment hinges on regulatory certainty, the brewer's top executive was quoted as saying by The Malaysian Insider on April 20.

Multi Bintang, majority-owned by Dutch brewer Heineken, had previously allocated the money over the next three years to raise its production capacity, president director Michael Chin said on the sidelines of the World Economic Forum in Jakarta. Multi Bintang has two breweries and one plant producing non-alcoholic beverages in Indonesia.

A regulation banning the sale of alcoholic drinks at minimarts took effect in Southeast Asia's largest economy on April 16, though they will still be sold at supermarkets, hotels, bars and restaurants.

"Indonesia has been very liberal in selling alcoholic drinks," Chief Economics Minister Sofyan Djalil told reporters on April 20. "We are looking at how we can control the distribution in mini-markets."

Sales of beer with alcohol content of less than 5 percent at minimarts typically make up around 15% of annual sales in the industry, Multi Bintang's Chin said.

"We have internally approved another investment of 40 million euros (over the next three years), however this will be obviously dependent on regulations," Chin said.

"We are still having dialogue with the government, trying to work out a more effective way of us trying to address this issue, yet at the same time, giving accessibility to consumers above the legal drinking age."

Multi Bintang, the market leader in Indonesia for beer sales, has already been exporting to Australia and is looking at potential markets such as Japan and South Korea, Chin said.

Heineken owned 76.2% of Multi Bintang as of December 2014, according to Thomson Reuters data.

22 April, 2015