Con­fu­sion emerges af­ter for­eign liquor ban

The Myanmar Times - - Business - EI EI THU eiei­thu@mm­times.com

AT a liquor store in down­town Yan­gon, bot­tles of whisky and wine are on dis­play. Upon closer in­spec­tion, one soon no­tices that wines from Ar­gentina to New Zealand are for sale, but only whiskies made lo­cally are avail­able.

“For­eign liquors are not on dis­play be­cause we are not al­lowed to sell them,” the sales as­sis­tant at the store tells one cus­tomer. “But we can still get you the im­ported liquor­sif you want it,” she added in a hushed tone.

There have been sim­i­lar cases all over Yan­gon since the city’s Food and Drug Ad­min­is­tra­tion, In­ter­nal Rev­enue Depart­ment, Depart­ment of Con­sumer Af­fairs, and Depart­ment of Trade told liquor re­tail­ers and whole­salers in the city in Septem­ber that they would no longer be al­lowed to sell im­ported liquor.

Con­fu­sion lingers But traders and some govern­ment of­fi­cials are still con­fused as the ban con­tra­dicts a sep­a­rate reg­u­la­tion by the Min­istry of Home Af­fairs, which is­sues the FL-12 li­cence al­low­ing re­tail­ers to sell any kind of im­ported al­co­hol. This has been the prac­tice since the colo­nial era, said U Thein Zaw Oo, ad­min­is­tra­tor of Kar­mayut Town­ship, Yan­gon.

Yet, the Spe­cial Com­mod­ity Tax Law pro­hibits the im­port and sale of for­eign liquor, beer and cig­a­rettes. In 2015, the Min­istry of Com­merce (MOC) lifted the ban on im­ported wine, but liquors and beers re­main il­le­gal.

“This has been the case for years and no one can say they do not know it is pro­hib­ited by the law,” U Khin Maung Lwin, deputy per­ma­nent sec­re­tary of the MOC, told The Myan­mar Times.

“Only air­port duty-free shops and some ho­tels are per­mit­ted to sell im­ported liquor and these are tar­geted at for­eign visi­tors. But dis­tribut­ing and sell­ing do­mes­ti­cally is il­le­gal and we will take ac­tion,” he said. The pun­ish­ment for re­tail­ers found with the goods is three years in prison and con­fis­ca­tion of the goods.

How­ever, U Thein Zaw Oo said, up un­til 2013, the Gen­eral Ad­min­is­tra­tion Depart­ment had con­tin­ued to is­sue FL-12 li­censes. Ac­cord­ing to the depart­ment, prior to 2013, more than 2000 FL-12 li­censes were is­sued in Yan­gon Re­gion each year, bring­ing in around K3.4bil­lion in fees an­nu­ally. The depart­ment stopped is­su­ing the li­censes af­ter a surge in ap­pli­ca­tions in 2013.

Mean­while, taxes are also col­lected for the liquor at the point of sale. “That is why some liquor re­tail­ers have openly sold im­ported whiskies be­fore. FL ac­tu­ally stands for for­eign liquor, so it’s quite con­fus­ing,” he said.

Law en­force­ment As it is stip­u­lated un­der the law though, the MOC’s en­forc­ing of the im­ported liquor ban is ex­pected to take prece­dence over the li­cences.

U Myint Cho, di­rec­tor of Con­sumer Af­fairs in Yan­gon, said the im­pe­tus for en­forc­ing the ban is com­plaints from do­mes­tic pro­duc­ers about the sale of il­le­gally im­ported liquors at lo­cal stores.

The move spear­heads a much needed crack­down on il­le­gal for­eign liquor im­ports. “Il­le­gally im­ported al­co­hol costs the govern­ment lost tax rev­enue and can en­dan­ger pub­lic health,” he said dur­ing a meeting with liquor re­tail­ers last month. Be­cause il­le­gal liquors es­cape tax, they are also sold at lower prices, which un­der­mines lo­cal pro­duc­ers.

“We will in­ves­ti­gate how larger quan­ti­ties are en­ter­ing the coun­try,” he said, adding that the au­thor­i­ties will charge those found sell­ing im­ported liquors.

No­tably, since the depart­ment stopped is­su­ing FL-12 li­cences, a black mar­ket for them has emerged. “Since we stopped is­su­ing the li­cence, peo­ple have been pay­ing large amounts for them on the black mar­ket. Ac­cord­ing to re­tail­ers, the fee for an of­fi­cial FL-12 li­cence in the past used to be K1.5 mil­lion. Now though, li­cence hold­ers are ask­ing for as much as K10 mil­lion for them, de­pend­ing on the lo­ca­tion.

FL-12 li­cences are most sought af­ter by bar own­ers and hote­liers. Ac­cord­ing to the Min­istry of Ho­tel and Tourism, only 168 ho­tels out of the 1500 ho­tels that have since opened in Myan­mar have liquor li­cences.

How­ever, there is not data on which ho­tels have re­ceived the li­cences to im­port and sell for­eign liquor, U Myo Win Nyut, di­rec­tor of Min­istry of Ho­tel and Tourism told The Myan­mar Times.

No charges yet Since the changes though, no one has yet been charged. “There has been no in­struc­tion for town­shiplevel ad­min­is­tra­tion de­part­ments, which col­lect taxes and en­sure the rules are fol­lowed, to co­op­er­ate on the mat­ter,” U Thein Zaw Oo said.

For its part, the MOC is now dis­cussing plans with the Ho­tel and Tourism, Home Af­fairs and Plan­ning and Fi­nance min­istries to con­duct joint checks and in­spec­tions on il­le­gal liquor im­ports, dis­tri­bu­tion and sales, U Khin Maung Lwin said.

In the mean­time, liquor re­tail­ers have started to fight back. “The govern­ment can get high vol­umes of tax rev­enues and li­cence fees from restau­rants, bars and night clubs so they should re­con­sider this is­sue,” said U Kaung Min Khant, a bar and restau­rant owner.

U Maung Lone, a liquor re­tailer who has been op­er­at­ing a liquor store with an FL-12 li­cence since 1996, said the govern­ment is en­forc­ing the law against im­ported liquors now to pro­tect lo­cal liquor pro­duc­ers.

“That shouldn’t be the case in a demo­cratic coun­try. Mar­ket sup­ply and de­mand shouldn’t be the govern­ment’s busi­ness. Their fo­cus should be on col­lect­ing taxes. I pay nearly K10 mil­lion a year in taxes,” he said. “All we want is to proper per­mis­sion to sell for­eign al­co­hol.”

Photo: Aung Htay Hlaing

For­eign liquors on dis­play at a lo­cal store be­fore a re­cent ban.

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