Tuesday 10 December 2013

Booze crackdown ramps up, shops dry

A second major food and wine importer is being investigated for possible illegal importation of alcohol. On December 4, a government task force found 1000 cases of wine and foodstuffs in a warehouse in Thaketa township industrial zone belonging to Premium Distribution Co. Ltd.

The investigations have triggered shops and supermarkets throughout Yangon to pull imported wine and spirit stocks, forcing customers to settle for locally produced alcohol, which is notoriously poor in quality.

U Ngwe Soe, deputy director at the commerce ministry, who is on a government task force cracking down on illegal alcohol imports, said the estimated price of one bottle of the wine found at Premium’s warehouses in Yangon ranged from K7000 to K20,000. “These are the prices cited by Premium, we haven’t estimated yet,” he said. If so, the store would be worth several hundred thousand US dollars.

A source at Premium said about 90,000 bottles of wine had been found in the 7920-sq-ft space, though the mobile team’s estimate was nearly 80,000 bottles and about 30 tonnes of foodstuffs, including frozen meat, vegetables and preserved foods. The team, which was still examining the products as of December 5, said their investigation would conclude that night and they would confiscate the products.

Premium’s manager Daw May Myo Oo declined comment to The Myanmar Times as the investigation continued.

Premium, which is the largest distributor in the city, shut its wine and spirits wing last week, leaving its customers high and dry, a source close to the situation said.

“Basically, the SEA Games are coming and nobody is going to have wine. It is going to be a dry Christmas,” the source said, requesting anonymity for fear of persecution by the government.

He said that Premium has been unable to import any wine for more than three months and that its largest customers have begun stockpiling as much imported alcohol and wine as they can get their hands on.

“At this point, there is almost no champagne left in the country. It is like gold,” the source said, adding that without new import rules in place, the country could be completely dry of imported alcohol in one month’s time.

The investigation has drawn the ire of local supermarket chain City Mart, who openly criticised the government policies on imported food and beverages.

“There has been no transparency in the retail sector since we started in 1996,” the company said in a statement on December 6, announcing they have pulled their imported alcohol and wine stock from their shops.

“The trade policy at the moment is unclear. Because of that, over the past three months some supermarkets and shops stopped selling these products. City Mart, Ocean and City Express shops have stopped selling from today,” the statement continued.

But City Mart is not the only one to stop selling imported wine and alcohol as it is now as most shops in Yangon have either pull stock, or, like imported wine shop The Warehouse, shut down indefinitely while the investigation on Premium continues.

The raid follows the closure of Quarto Products, a major food and alcohol importer with links to international hotels, at the end of October. The Ministry of Commerce’s Department of Commerce and Consumer Affairs is now prosecuting Quarto’s managing director, who is facing a three-year jail term. The company has since resumed deliveries.

“When we investigated Quarto, they could show the hotels’ import licences. But Premium might have a problem if they don’t have any licence or duty-free permit, and these are massive amounts,” said a director of the Illegal Trade Prevention and Supervision Control Committee of Commerce.

The officials will allow Premium a few weeks to provide the necessary documentation before taking action, he said.

“We will allow their foodstuffs if they can show FDA approval, but if there are no licences to import wine and alcohol, we will act according to the law,” he said.

Despite laws against the importation of wine, hotels and duty-free shops are allowed to bring alcohol and cigarettes into the country. The restrictions, which date back several decades, have been criticised for encouraging illegal imports.

To get around the ban, some businesses have been known to collaborate with hotels to import additional alcohol products that are then sold to restaurants and retailers – as Quarto is accused of doing – while others simply import through illegal channels.

Hotels importing relatively small amounts of alcohol found it easier to work with a distribution company. But in a regulation promulgated last month, the Ministry of Hotels and Tourism now requires hotels to import alcohol directly, not through distributors. The commerce ministry will check import licences, sales contracts, and the nature and price of the products, and the hotel has to agree not to sell the products off its premises.

Hotels imported about US$330,000 worth of alcohol and foodstuffs (including $124,000 worth of alcohol) on the basis of letters of recommendation from the Ministry of Hotels and Tourism in the 2012-2013 fiscal year, according to government data. The amount for the current year up to November was about $216,000 (of which $123,000 was for alcohol).

source: The Myanmar Times

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