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Alcohol consumption in Indonesia

Deadly booze meets a strict Muslim culture? Party on.

Last year, hotels and restaurants suffered through a severe alcohol shortage when customs officials, suspicious that P.T. Sarinah, the state-owned alcohol importer, had undervalued its shipments, confiscated more than 30 shipping containers full of bottles just before the winter holiday season. For months, signs in bars and clubs throughout Bali and Jakarta apologized to customers for the lack of available alcohol.

All of this has partygoers and tourist industry leaders in a huff.

“We are concerned not just for the big five star hotels, but for the hundreds of small restaurants as well,” said Noviar Amir, executive director for the Association of Hotels and Restaurants in Bali. “Bali, which draws the most tourists, is the face of Indonesia. We have to service not just locals, but foreigners as well. So when these regulations make it difficult to find affordable alcohol, it can be a problem.”

Several analysts said the various tariffs can create a near 500 percent increase in the cost of alcohol, far higher than Malaysia, which is also a predominantly Muslim country. Much of this cost is passed on to the consumer, making the price of a beer in a country famous for its affordability not unlike that in the West.

The industry breathed a momentary sigh of relief when Finance Minister Sri Mulyani announced she would scrap an expensive luxury sales tax on April 1. The celebration, however, was short-lived. Weeks later she announced a dramatic increase in the excise tax.

“So the price will stay more or less the same,” said Yudo. “I think the government has chosen to set the tax at a rate that is safe for public opinion, and right now the public in most of Indonesia regards alcohol as dangerous.”