JAKARTA (TheInsiderStories)- The provincial government of Jakarta will divest its entire 26.25 per cent stake in beer maker and distributor PT Delta Djakarta Tbk, Governor Anies Baswesdan said on Wednesday (16/5).

Baswedan said the divestment is expected to fetch some Rp1 trillion, which will be used to create employment opportunities, build education facilities and support health programs.

The decision was a follow-up to a campaign promise by Baswedan and his running-mate Sandiaga Uno, Sandiaga Uno, who earlier said that it was improper for the city administration to own a stake in a brewery.

DLTA is Indonesia’s largest beer maker, popular with brands such as Anker, Carlsberg, San Miguel and Kuda Putih as well as Batavia, made exclusively for overseas markets.  It also engages in the non-alcoholic beverages with brands such as Sodaku and Soda Ice.

The divestment fund will later be used for the development and could add the city’s revenue up to more than Rp1 trillion. The fund will later be allocated to open job employment, build education facility, and establish health program.

DLTA runs a highly profitable business, contributing some Rp37 billion to the city’s budget last year alone. In its financial statements in 2017, DLTA booked 10.26 per cent growth  profit to Rp279.9 billion from Rp253.7 billion in 2016, while the total export sales rose 60 per cent to Rp 1.6 billion from Rp1 billion in 2016. DLTA share price performance throughout 2017 also rose 4.83 per cent.

In 2016, beer began to recover from the heavy blow of Permendag No 06/M-DAG/PER/1/2015, which banned the sale of class A alcoholic drinks in convenience stores and traditional grocery retailers from January 2015.

This has been cited as one of the reasons for the last year closure of 7-Eleven, a convenience store chain, that had earlier enjoyed popularity among young people hanging out over beer.

As a result, manufacturers have chosen to focus on areas and channels with higher growth potential, including tourist destinations such as Bali and Lombok, as well as on-trade channels, such as restaurants, bars, and hotels. Leading player Multi Bintang Indonesia Tbk Portugal has also introduced a stream of new non-alcoholic beer product launches in a bid to penetrate retail channels and secure more retail space.

However, still beer is gaining popularity in Indonesia, especially in urban enclaves since alcoholic drinks are still allowed to be sold in the larger supermarkets, restaurants, cafes and hotels.

According to the World Bank 2015 report, Indonesia, home to world’s biggest Muslim population, consumes the least alcohol in Southeast Asia with its people on average drinking just 0.6 liters of alcohol, not even one bottle of wine, a year.

What was surprising was that Indonesia was more sober than Malaysia and Brunei Darussalam. South Korea ranked number one with 10.9 liters of average alcohol consumption per person, while Vietnam was in second position with 8.7 liters of alcohol consumption per person per year.

Email : elisa.valenta@theinsiderstories.com