A priority bill that proposes a ban on all consumption of alcoholic drinks is expected to shut down an industry that contributes trillions of rupiah to state revenues and employs up to 200,000 workers across the country, according to a business group.

The bill, reminiscent of the US'€™ prohibition efforts in the 1920s, will outlaw the production, distribution and sale of all beverages with more than 1 percent alcohol content. It was proposed by the House of Representatives to its Legislation Body (Baleg) on Monday.

Indonesian Malt Beverage Producers Association (GIMMI) executive director Charles Poluan said on Tuesday that once passed into law and put in place, the bill would effectively shut down manufacturers along with their supporting distribution chains. It would directly affect between 1,000 and 2,000 workers and indirectly up to 200,000 workers involved in sales.

'€œIn the worst case, the ban will turn the status of alcoholic beverages from legal to illegal. Consequently, it will in the end shut down the entire industry,'€ he told The Jakarta Post in a phone interview.

This policy risks boosting the production and distribution of illegal alcoholic drinks and bootleg liquor, which could be more alarming in terms of health and safety standards.

According to Charles, the government should tighten the control and supervision of sales like in Malaysia and Singapore, instead of totally banning the whole business to curb excessive consumption of alcoholic beverages.

Baleg member Muhammad Arwani Thomafi of the National Development Party (PPP) earlier told the Post that people who consumed alcoholic drinks could be dragged into jail as their actions would be considered equal to drug trafficking. He refuted concerns that the bill was driven solely by an attempt to comply with religious norms, saying that health issues were similarly considered.

A person influenced by alcohol may get one to five years in jail for disturbing public order and threatening the safety of other people, according to the bill.

Charles also said that the ban would negatively impact the tourism industry, a setback to the government'€™s current effort to attract higher numbers of tourists so as to collect more income to enlarge its foreign reserves.

Businesses express deep concerns that the policy could disrupt the investment climate and largely hurt industry, which contributed around Rp 4 trillion (US$308.07 million) to the state revenue last year.

'€œIf the bill is passed into law, it must disrupt the business and investment climate,'€ Cosmas Batubara, the president commissioner of PT Multi Bintang Indonesia, which makes the well-known Bintang Beer, told the Post in a text message.

Earlier, business players, particularly retailers, protested a Trade Ministry Regulation that bans the sale of beer in minimarkets and kiosks, which they claim was unnecessary because they already limit sales to persons older than 21 years. The new rule became effective earlier this month.

Thanks to a growing middle class with a stronger purchasing power and the arrival of a larger number of foreign tourists, the alcohol industry in Southeast Asia'€™s top economy has expanded considerably in the past decade.

Beer sales have surged by 54 percent over the last 10 years, making Indonesia the 10th-largest beer consumer in Asia, according to data compiled by Reuters.

Last year, the government encouraged investment in producers of alcoholic drinks by easing the requirement for their business expansion to cater to rising domestic demand, as stipulated in the revised negative investment list (DNI).

The Industry Ministry'€™s industrial climate and quality policy research center director Haris Munandar said the bill contradicted last year'€™s DNI revision.

'€œOnce the bill is passed into law, it will be stronger than the DNI, which is only enforced through a government regulation,'€ he said.

Excerpts from the bill

- Article 8
Certain areas and businesses will be exempt from the prohibition.

- Article 17
Any person producing or distributing alcoholic drinks will face two to 10 years in prison or a fine of between Rp 200 million (US$15,500) and
Rp 1 billion.

- Article 18
Any person consuming alcoholic drinks will face three months to two years in prison or a fine of between Rp 10 million and Rp 50 million.

- Article 19
Any person under the influence of alcohol will face one to five years in prison and fines of between Rp 20 million and Rp 100 million for disturbing public order and threatening the safety of others.

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