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Prices that Drive You to Drink

Denpasar, Bali administration Increasing Licensing Fees for Business that Sell Alcoholic Beverages

(1/26/2012) The Jakarta Post reports that plans by South Bali officials to increase as much 300% the cost of a license necessary to sell alcoholic beverages is angering both Bali business owners and tourism leaders.

Denpasar's increase in licensing is yet another cost that must be factored in to the selling price in a Country where import and other taxes imposed on alcoholic beverages are among the highest in the world.

Ida Bagus Gede Sidharta Putra, chairman of the Denpasar branch of the Indonesia Hotels and Restaurants Association (PHRI), said: “Prices of alcoholic beverages in Bali are 1.5 to two times more expensive compared with Singapore and other countries. With this sudden increase in the licensing fee, how are we supposed to adjust the prices?”

Under the new policy, starred hotels pay Rp. 5 million (US$ 520) for each alcoholic beverage outlet valid for 5 years. The old price for the same license was Rp. 1.5 million (US$ 166).

Non-starred hotels will pay Rp. 2.5 million (US$ 277) - an increase from the old license fee of Rp. 750,000 (US$ 83).

Duty free shops selling alcohol will now pay Rp. 7 million (US$ 777) representing a massive increase from the former license cost of Rp. 2 million (US$ 222).

Pub, restaurants, cafes and supermarkets wishing to sell alcoholic beverages must now higher licensing fees: Pubs and bars now pay Rp. 1.5 million; restaurants and cafes Rp. 2.5 million; and supermarkets/retailers Rp. 5 million.