|All to be removed from 7-11 from 16 April 2015|
Indonesian Minister of Trade Affairs Rachmat Gobel has announced minimartkets will be prohibited from selling beer effective16 April 2015. Under the new regulation 06/M-DAG/PER/1/2015 signed on 16 January 2015, the selling of alcoholic beverages with up to 5% alcohol content in small, modern retail chain including mnimarts will not be allowed. Such alcoholic beverages are classified under Class A. However, the sale of alcoholic drinks with up to 5% ABV is still permitted in supermarkets and hypermarkets and in pubs and hotels. The ban will affect small, modern chains including convenience stores such as 7-11 and Circle K.
Beer manufacturers and minimart operators already see this as a long time making. Local governments in several locations in the country including Tangerang and Bogar has already banned alcoholic beverages in minimarts. Sumber Alfaria Trijaya corporate affairs director Solihin said the company “will obey the rules” and added that alcohol sales were not big income spinners.
Looking at the sales mix of Indomaret in 2012, beverages indeed only contributed 13% of sales, of which the share of alcoholic drinks was even lower, probably at 1-2%. Small, modern retailers will have to find new products to populate the shelf, which is good news to consumers as more products will be given better shelf placement.
|Sales mix of Indomaret in 2012|
The recent launch of Guinness Zero, an alcohol-free drink, comes as at a time when Indonesian beer manufacturers are changing their product mix. Tough government regulations and a low per capita consumption of soft drinks mean the move forward is to focus more on non-alcohol sales.
Even in the the beer-loving Philippines where San Miguel Brewery (SMB) takes a 90+% share of the market, heavy taxes and high beer per capita spend has necessitated SMB to announce a new a multi-beverage strategy. In December 2014, the liquor unit of San Miguel, Ginebra San Miguel, said it would sell its non-alcoholic business to SMB. The non-alcohol beverages of Ginebra San Miguel include Magnolia Fruit Drink Mix, Magnolia Healthtea Mix, Magnolia Fruit Drink, Magnolia Healthtea Bottle, Magnolia Purewater and Berri Juice.
The alcohol sales ban in Indonesia does deprive alcohol companies from the impulse distribution channel with the strongest impact to be felt in the touristy Bali. The ban does set in motion a continued shift towards a multi-beverage strategy as alcohol companies tap opportunities in the fast growing non-alcoholic categories. Such trends is already evidenced in Indonesia and in the Philippines.