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Indonesia. Alcohol ban jeopardizes industry, tourism

The deliberations on the alcohol prohibition bill have been causing consternation among tourists, businesspeople and even labor unions, as the question, to beer or not to beer, is expected to have a serious impact.

“A holiday without beer in Bali would be dreadful,” said Briton Peter Robertson, who was vacationing in Bali. Without access to beer, which is considered a recreational beverage in countries such as the UK, tourists like Robertson would be discouraged from visiting Indonesia.

French national Pierre David, enjoying his honeymoon in Sekotong, Lombok, West Nusa Tenggara, said a couple of glasses of beer were essential for any celebration.

As tourists let off steam by drinking with friends and family on vacation, lawmakers at the House of Representatives and the government in Jakarta are working on a bill that will make it difficult to obtain alcohol.

According to the initial draft, sponsored by Islamist-oriented parties the United Development Party (PPP) and the Prosperous Justice Party (PKS), the production, distribution and consumption of alcoholic beverages will be completely outlawed.

Exceptions will apply for customary activities, religious rituals, tourists and pharmaceutical products.

The purpose of the bill, as the draft claims, is to “protect citizens from the negative impacts of alcoholic beverages, to raise awareness of the dangers of the beverages, and to ensure order and peace in society, free from disturbances caused by consumers”.

The deliberations came after then trade minister Rachmat Gobel issued in 2015 Ministerial Regulation No. 6/2015 on the distribution of alcoholic beverages, prohibiting supermarkets and minimarts from selling drinks containing more than 5 percent alcohol.

Industry representatives say the total prohibition of alcoholic beverages will have a negative impact on business. Hotel and Restaurant Association chairman Hariyadi Sukamdani said a total ban on alcoholic beverages would be a threat to the sustainability of hotel operations as it could discourage foreign tourists from coming to Indonesia.

The move appears to contravene the government’s recent attempts to boost the number of foreign tourists to 20 million by 2020, almost twice the figure recorded in 2015.

It is aggressively promoting Indonesian destinations to countries such as Singapore, Malaysia, Japan, South Korea, China, India, Germany, Dubai and Australia. It has also scrapped visa requirements for an additional 84 countries this year, making a total of 174 free-visa countries.

Indonesian Malt Beverage Industry Group (GIMMI) spokesman Nimpuno “Ipung” Wibowo Sapto Aji said the industry was already strictly controlled with more than 30 regulations from the central government and an additional 150 by local administrations. Further restrictions would cause the industry to wither, he told The Jakarta Post.

According to data from the Centre for Strategic and International Studies (CSIS), an estimated 1,800 people with direct connections to the alcohol industry will lose their jobs as a result of the total prohibition of alcoholic beverages. An additional 128,230 people in supporting industries, such as agriculture and restaurants, will face the same fate.

Annual production of the alcoholic beverage industry is valued at around Rp 5.7 trillion (US$434.28 million) and brings in Rp 6 trillion per year in excise tax. Total prohibition would wipe out all these figures.

Publicly listed beer manufacturer PT Delta Djakarta labor union secretary Jodhi Caster said workers had already suffered from last year’s Trade Ministry regulation. No layoffs have taken place, but production has been significantly cut.

9 Aug. 2016

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