Business

Burma to Review Booze Import Policy: Ministry

By Kyaw Hsu Mon 23 December 2013

RANGOON — Burma has started an official review of its alcohol import law, considering whether to maintain heavy restrictions on the sale of foreign booze following a controversial crackdown on retail shops found to be selling it illegally.

The Ministry of Commerce has met with legal experts and industry professionals—including local alcohol manufacturers, duty free shop owners, hotel managers and tax collectors—to discuss possible changes to the law, and to assess how the crackdown has affected business.

“We will have to look forward and consider all the consequences of this,” Than Aung Kyaw, director of the ministry’s Directorate of Trade, told The Irrawaddy on Monday. “We will study how neighboring countries use import laws for alcohol products, as well as how they collect taxes, and the impact.

“If we allow imports of wine, who do we allow­, how do we check, and what tax do we collect? These factors are quite related and should be considered.”

He cautioned that changes would likely not occur quickly.

“Some say we are going to allow wine imports—it is still not true,” he said. “We are still considering these factors, and we will have to monitor over a long period of time to determine whether we will allow these products.”

He said the ministry also needed to consider how the law affected local manufacturers and distributors. “All we can say is, we are reviewing everything related to the import law,” he said.

Since the mid-1990s, the government has implemented a ban on the import of alcohol, tobacco and other luxury goods, only allowing certain hotels and duty-free shops to carry out such imports. The ban was part of the former military government’s policies under which military- or crony-owned companies controlled large parts of the economy, including alcohol manufacturing.

But over the past few months, enforcement has tightened. Starting in October, two mobile taskforces—comprising ministry, customs and police officials—have raided retail warehouses in Rangoon and Mandalay to investigate the legal status of imported alcohol, tobacco and preserved frozen foods.

Following these raids, two retail executives have been arrested, including the director of Premium Food Service Products, a supply company owned by Burma’s biggest retailer, City Mart Holding. The managing director of Quarto Products, a large beverage distributor in Rangoon, is also facing charges.

Most retailers in Burma’s biggest city have stopped selling foreign booze out of fear of being raided, leading to a shortfall of liquor supplies and complaints from customers.

Retailers say the crackdown has been unfair, with the ministry failing to take action against importers who they say share blame for the situation.

Premium Food Service Products stocks its alcohol through firms belonging to Htoo Group of Companies and ACE Group of Companies, two large conglomerates owned, respectively, by well-known tycoon Tay Za and Phyo Ko Ko Tint San, whose father is Sports Minister Tint San. Neither conglomerate has faced charges since the raids began.

The Myanmar Retailers Association has urged the ministry in a letter to review the import law but was not invited to the most recent meeting to discuss possible changes.

“This week we heard the Ministry of Commerce would probably allow [imports] of foreign-made wines first, and then some other alcohol would follow, step by step,” a spokeswoman for the association told The Irrawaddy on condition of anonymity, citing the sensitivity of the situation. “Currently we are facing a lot of problems, consumers are complaining every day, demand is high.”

Than Aung Kyaw from the Commerce Ministry said he expected that retailers and importers would both benefit in the future from changes to the law.

“We will have to listen to public voices, too,” he said.

He added that he was not concerned with a shortage of alcohol supply during the tourism high period.

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