Govt Crackdown on Imported Alcohol Intensifies, to Concern of Retailers

By Kyaw Hsu Mon 11 December 2013

RANGOON — In the past week, the Ministry of Commerce has intensified its crackdown on what it deems illegally imported alcohol, sparking further unrest among retailers, including Burma’s biggest supermarket chain City Mart.

Most retailers have now stopped sales of foreign booze out of fear for being raided, leading to a shortfall of liquor supplies and complaints from consumers and restaurants.

In the meantime, the retail sector’s calls for a revision of government policy on alcohol imports are growing louder.

A Commerce Ministry mobile task force last week raided a warehouse of Premium Distribution, a company owned by City Mart Holdings, to inspect the legal import documents of thousands of bottles of foreign liquor, wine and beer held in stock.

Myint Oo, a task force member, said, “We’re checking the lists and products in the Premium Distribution warehouse in Thaketa Township, so we can’t say now how many alcohol bottles will be confiscated.”

He said the ministry’s Illegal Trade Prevention and Supervision Control Committee had ordered mores checks among retailers and their suppliers, adding that the legal import status of imported tobacco and preserve frozen foods, such as frozen Turkey meat, would also be investigated. “We’ve been checking such places based on tips of informants,” Myint Oo said.

On Friday, City Mart Holdings announced that it was suspending sales of imported alcohol brands at its 15 City Mart super markets, 26 City Express mini markets and five Ocean super centers in Rangoon and Mandalay.

The company said longstanding government restrictions on the import of alcohol had forced it to supply its foreign booze from limited sources, some of which might have been imported illegally.

“We don’t know how our suppliers imported such products, but as long as suppliers are legally registered companies we will buy from them. So we don’t know their background channels,” a City Mart spokesperson told The Irrawaddy on Tuesday.

In a statement on Friday, City Mart said unclear government policies on alcohol imports had given rise to the supply problems. “While local businesses are trying to improve business operations, the government should begin to plan a better [import] policy that is more transparent. This would offer the best remedy,” the firm 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.

Over the years, retailers selling foreign alcohol brands were forced to resort to supplies brought in through the hotel industry or black market import channels. They were often able to do so without facing government action.

Since September, however, Commerce Ministry teams have reportedly begun raiding some of Burma’s biggest alcohol distributors in search of illegal imported alcohol brands.

In October, 30,000 bottles of wine and 2,400 cans of beer were confiscated in a Rangoon warehouse of Quarto Products, The Myanmar Times reported. The ministry reportedly opened a court case against Quarto, a large beverages distributor, and its managing director could now face three years imprisonment for involvement in illegal alcohol imports.

The unannounced checks continue and have forced retailers to pull imported alcohol products from sale. Customers and some businesses, such as restaurants, have complained that they cannot find imported, high quality alcohol brands.

Tun Naing Win, who owns a restaurant in Rangoon’s Kyi Myin Dine Township, said, “In the past, retailers were selling [imported] whisky bottles with a tax seal… now all have disappeared.” He said his suppliers had begun to stock imported alcohol, selling it only to valued customers at double or triple the usual prices

“Most of my suppliers are based in Lanmadaw Township… I can get real foreign-made alcohol from them, as well as in Myay Ni Gone Township, but prices are up significantly,” said Tun Naing Win.

Kyaw Lin, a resident of Rangoon’s San Chaung Township, said, “I can’t find real foreign-made whiskey or wine in any retail shops.

“Just local brands are left on the shelves. Grand Royal, Myanmar Beer, Aye Tharyar Wine, made in Myanmar,” he said, before adding, “But some shops that know me well are selling foreign brands to me secretly.”

The Myanmar Retailers Association in a statement to The Irrawaddy criticized the Commerce Ministry’s sudden strict implementation of the import ban.

“The government should have informed retailers first, before taking action. We have already sent a letter to the government with our suggestions [to address the import ban] in November, but we’ve received no response,” the organization said.

A member of a large retail organization, who spoke on condition of anonymity, alleged that the Commerce Ministry crackdown had targeted the retailers and not the illegal importers of alcohol.

“Actually, they are not checking the real big importers in Rangoon and Mandalay, they’re only raiding retail shops,” the source said, adding that liquor stores owned by the military-owned conglomerate Union of Myanmar Economic Holdings (UMEHL) seemed to have received prior warning of the crackdown.

“The liquor store at Ruby Mart owned by UMEHL, removed its foreign alcohol brands in September,” the source said.

Dr Maung Mg Lay, vice-chairman of Union of Myanmar Federation of Chambers and Commerce Industry (UMFCCI), also criticized the crackdown, saying the Commerce Ministry decision to raid retailers had been rash and sent shockwaves through the sector.

“It should have handled this issue more gently, the government should give enough time to them—importers, retailers,” he said, adding that cracking down on import alcohol supply chain would limit supplies and force retailers and customers to rely on black market sellers.

“Prices will increase and the black market will become bigger,” he said, adding that illicit alcohol supplies could lead to sales of “fake products that could affect physical health.”

Thein Htun Oo, the assistant director of Commerce Ministry’s mobile task force said, however, that the crackdown would continue. “The ministry will have to check such products and whether they are legally imported or not. If they do not have any legal import license, we will definitely charge them in accordance with the law,” he said.