Indonesia's capital Jakarta to allow small stores to sell beer again

JAKARTA (Reuters) - Indonesia's capital Jakarta is bringing beer back to its mini-marts, the city's governor said on Tuesday (May 24), more than a year after sales of the alcoholic drink were banned in small retailers in the world's most populous Muslim nation.

"The point is (drinks with alcohol content) below 5 per cent will be allowed, and beer is included," Jakarta Governor Basuki Purnama Tjahja told reporters, adding that unlicensed vendors would be penalised.

But the ban, which was last year issued by the Trade Ministry, remains in place across the rest of the country. "The prohibition of sales of alcoholic beverages in retailers the size of mini-marts and below, is still in place," Trade Minister Tom Lembong told Reuters by text message.

According to media reports at the time, the ministry implemented the ban to crack down on underage drinking. Larger retailers can still sell beer, as well as spirits and wine.

Provincial and city governments in Indonesia are allowed to regulate the sales and distribution of alcohol independently of central government rules.

Major brewers have raised concerns over the national ban, saying the regulation could hurt profits and expansion plans in South-east Asia's biggest economy.

PT Multi Bintang Indonesia, majority-owned by Heineken, had said last year that a planned 40 million euro investment hinged on regulatory certainty. The east Javanese city of Surabaya this month proposed a ban on alcohol, but it remained unclear if this would apply to hotels and bars in the country's second-largest city.

The predominantly Christian province of Papua last month banned alcohol, blaming its consumption for a rise in crime, according to the local media.