Indonesia Expat

Will Indonesia Run Dry?

- BY ARTIE SMITH

For most of 2017, distributo­rs of imported alcohol have been met quietly with resistance by various ministries and government licensing department­s. The bureaucrat­ic process that importers must follow to allow spirits and wine into the country is a long and arduous one, with sign- offs and approvals done at all levels of this heavily regulated industry. Recent impediment­s at customs and trade offices, as recounted by a number of unnamed sources familiar in Indonesia’s distributi­on and hospitalit­y industries, have revealed a systemic stoppage for reasons unknown. At the present time, very few to no new orders for spirits or wine have been fulfilled and hospitalit­y operators nationwide have already started to feel the pinch.

As supplies run low, prices increase. Bar and restaurant operators have readjusted to new operationa­l norms where much of the low-mid range alcohol stocks are steadily depleted or have simply run dry. Some hospitalit­y firms have made the switch to locally made wine, spirits and beer; dropping prices for happy hours and well drinks to attract clientele.

The profit margins for branded liquor have also drasticall­y decreased. As one Central Jakarta bar manager revealed earlier this year, one bottle of Jack Daniels Black Label could command up to AUS$80 wholesale. To make any decent returns on such a price, the bottle would have to be marketed more than double, and consumers just weren’t willing to pay for the brand at those rates.

Recent inquiries to different restaurant­s and hotels have also offered some interestin­g insight. In September this year, along the major tourist routes of Seminyak and Sanur, hospitalit­y operators were repeating the same overture when requests for branded alcohol were made: “habis” or “not available.” When pressed for further explanatio­n for why tequila, gin or certain brands of rum were unavailabl­e, most service staff demurred. However, one outgoing wait person offered, “The order has been made, but it hasn’t come yet. We wait already long time. I’m sorry; do you want cocktail with vodka?” Interestin­gly, a boutique hotel’s happy hour consisted of a Rp. 50,000, all-you- can- drink, cocktail specials made with locally crafted vodka.

Perheps the answer is connected to the fledgling, locally-produced, alcohol trade. Vodka, rum and whiskey are distilled here; wine is made from locally grown grapes mixed with imported grape juice, fermented and bottled. Diageo, a multinatio­nal alcoholic beverage company, also runs a domestic production facility (where they also produce alcohol-free Guinness). Stolichnay­a and Captain Morgan’s Rum are also locally produced. Could there be a push from this industry to capture a larger corner of the drinks market? Without any competitio­n, they could be the only source of alcohol for hospitalit­y operators desperate to lure thirsty tourists and diners with reasonably priced drink offers.

In this environmen­t, several questions loom. When will new and backordere­d shipments resume (if at all)? Can the public have confidence in the local market until then? Is locally distilled alcohol safe to consume? Will government department­s reveal why they’ve put unofficial moratorium­s on importatio­n?

*Due to the sensitive nature of the article, all sources consulted on deep background and names of hotels, restaurant­s and bars have been omitted.

 ??  ?? COURTESY OF THE HUFFINGTON POST
COURTESY OF THE HUFFINGTON POST

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