Govt Still ‘Taking Input’ on Revising Alcohol Import Ban

By Kyaw Hsu Mon 18 February 2014

RANGOON — It’s been four months since authorities swooped in on retailers of imported alcohol, confiscating tens of thousands of bottles of foreign booze in Burma’s two biggest cities, but a new trade policy to clarify the ensuing regulatory confusion has yet to be put forth, according to a Commerce Ministry official.

The director of the ministry’s Directorate of Trade, Than Aung Kyaw, told The Irrawaddy this week that the government was in the process of taking input from the Myanmar Retailers Association before promulgating a new legal framework.

Since December, 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. More recently, Than Aung Kyaw said his ministry had reached out to the Myanmar Retailers Association and other voices from related industries.

Last October, two mobile task forces, made up of officials from the Ministry of Commerce, Customs Department and police, conducted raids on retail warehouses in Rangoon and Mandalay to investigate the legal status of imported alcohol, tobacco and preserved frozen foods. Two company executives were arrested, including the director of Premium Food Service Products, a supply company owned by Burma’s biggest retailer, City Mart Holdings, and the managing director of Quarto Products, a large beverage distributor in Rangoon.

In late December, authorities eased off on the crackdown, allowing the limited sale of foreign brands while the government considered changes to the current law.

“We want to listen to private sector voices over the foreign alcohol; we don’t want to make the decision by ourselves. That’s why we are giving time for retailers to discuss what they want in a better trade policy. After that, our ministry and other related ministries will evaluate and will send it [a new policy] to the president for approval,” Than Aung Kyaw said.

A police task force, the Ministry of Commerce and the Customs Department, along with the ministries of education and information, will be included in consultations to draft amended alcohol import regulations, he said.

“The reason that the education and information ministries are included in our team is, alcohol sales relate to students who might be underage buyers; we will have to take them into consideration. And also the Ministry of Information, which regulates alcohol advertising and [will be responsible for] preparing a public awareness campaign after the decision has been made,” he said.

Than Aung Kyaw said a more liberal trade policy had to be weighed against domestic realities, such as law enforcement’s ability to police the sale of more freely available foreign wines and spirits. He said retail shops had recently complained of the potential effect on tourist arrivals to Burma, but the Commerce Ministry official said he expected the impact would be minimal.

“If a foreigner wants to buy foreign wine or alcohol, they can easily buy it at hotels, because hotels are allowed to import alcohol,” he said, adding that he did not know when a new trade policy might be approved.

The Myanmar Retailers Association, which brings together leading national retailers including City Mart Holdings, initially sent suggestions to President’s Office Minister Tin Naing Thein, who formerly served as the nation’s trade minister, in November. In its recommendations, the association urged the Commerce Ministry to allow a broader group of retailers to import foreign alcohol, and said it would in turn accept a higher tax regime.

The Myanmar Retailers Association called for a trade policy that stringently enforced a more limited ban on which enterprises are allowed to import and sell goods in Burma.

The current system, the association said, had created a growing black market trade, with the unregulated shadow economy producing more and more counterfeit products and other goods of dubious quality—a development, it contended, that was bad for retailers, consumers and the government.

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. Despite the ban, many of the restricted items enter the local market illegally via the border trade.

In its November submission to the President’s Office, the Myanmar Retailers Association also recommended amendments to related legislation, such as existing laws regulating the manufacture and sale of alcohol and tobacco.

“Actually we’re ready to discuss with the Ministry of Commerce. We already sent our suggestions to the President’s Office, and if the Ministry of Commerce asks for further comment, we’re ready to discuss with them,” a member of the association told The Irrawaddy this week.

One City Mart official who asked for anonymity said with no new policy yet in place, the presence of foreign alcohol was dwindling on store shelves, which are now stocked with domestic brands and a trickle of foreign labels purchased from legal importers.