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ublicly listed PT Multi Bintang Indonesia, whose majority stocks are owned by Dutch brewer Heineken, plans to expand its non-alcoholic business this year in anticipation of the Indonesian lawmakers’ proposal to further restrict the sale of alcoholic beverages in the world’s largest Muslim-majority country.

As part of the company’s strategy to mitigate the impact of strict regulations and secure future revenue growth, PT Multi Bintang launched a number of new non-alcoholic beverage brands over the past few months.

The company launched Radler 0.0% under the Radler brand, two variants under its new soda brand, Fayrouz and two new Green Sands flavors.

The country’s largest brewer, producer of the Bintang beer brand, is confident that its new product innovations will prosper, reporting that it had observed an increase in demand for its non-alcoholic beverages (NAB).

In 2015, Multi Bintang’s NAB segment contributed 9 percent to the company’s revenue. The contribution increased to 13 percent from January to March this year, Michael Chin, Multi Bintang’s president director, said on Friday.

“We recently launched Radler 0.0% and the initial response has been positive,” he added.

The government’s decision to ban the sale of alcoholic beverages in convenience stores last year had a negative impact on the company’s sales.

Under Trade Minister Regulation No. 06/2015, beverages with an alcohol content of between 1 to 5 percent can only be sold at supermarkets and hypermarkets.

As a consequence of this regulation, PT Multi Bintang saw its sales slump by 10 percent to Rp 2.69 trillion (US$197 million) from Rp 2.98 trillion in 2015. In line with sales, its bottom line nosedived by 37.5 percent to Rp 497 billion from Rp 795 billion last year.

“2015 was a turbulent year for us but we have successfully ended the year having exceeded our expectations,” finance director Maarten Hoedemaker said.

He further explained that, driven by the improvement in consumer purchasing power and the market evolution as it adapts to the new regulation, the company had begun to see positive signs in the second half of the year.

In the first quarter of this year, PT Multi Bintang recorded a hike of about 42 percent in its first quarter sales to Rp 807 billion from Rp 568 billion in the same period last year.

The company’s net profit also showed a significant 127 percent increase to Rp 244 billion in 2016 from Rp 107 billion year-on-year.

Although the significant pick-up was partly caused by the significant drop in the same period last year, based on its observance of Indonesia’s main economic indicators — a stable rupiah, growing middle class and increase in tourism arrivals — the company has forecast a positive outlook for 2016.

At present, a controversial bill which could further add restrictions in the production, sale and or consumption of alcoholic drinks is currently under deliberation. The bill, if passed into law, will be the first law to impose a nationwide ban on the production, sale and or distribution and consumption of drinks with an alcohol content of 1 to 55 percent. The bill is expected to be passed later this month.

Without doubt, this alcohol bill has caused anxiety among beer manufactures, including publicly listed beer manufacturer Delta Djakarta, a local producer of major beer brands including Anker, Carlsberg and San Miguel.

Multi Bintang has shown further caution with regard to the regulation, as can be observed by the company’s decision to postpone its beer factory expansion plan worth Rp 635 billion, located in Mojokerto regency, East Java, this year. (win)