Alcoholic Beverage Sales and Promotions Conditions

PERTANYAAN

1. Are there legal basis/regulations that prohibit beer products from promoting products with beer or other products as prizes (e.g. buy 5 bottles of beer and get 1 bottle of beer or get other prizes)?
2. Are there prohibitions/regulations on promotions/lotteries which are held by entertainment venues/food courts with prizes of beer, and in order to win the lottery coupons, buyers must purchase the beer products?
3. Is it possible if every purchase of beer products will be donated to an orphanage? 

INTISARI JAWABAN

In substance, there are no provisions that prohibit beer products from promoting their products by giving gifts in the form of beer for every purchase of a certain amount of beer.

Meanwhile, regarding promotional provisions, registered importers of alcoholic beverages, distributors, sub-distributors, direct sellers, and retailers are prohibited from advertising alcoholic beverages in any mass media.

Please read the review below for a further explanation.

 

ULASAN LENGKAP

This article is an English translation of Ketentuan Penjualan dan Promosi Minuman Beralkohol which was written by Bernadetha Aurelia Oktavira and was published on Friday, 27 November 2020.

This article below is an update of the article entitled Provisions Concerning the Sale and Promotion of Alcoholic Beverage (Ketentuan Mengenai Penjualan dan Promosi Minuman Beralkohol) which was first written by Letezia Tobing and was first published on 29 Jan 2015.

All legal informations which are available through Klinik hukumonline.com have been prepared for educational purposes only and are general in nature (read the complete Disclaimer). In order to obtain legal advice specific to your case, please consult with Justika Partner Consultant.

There are basically no provisions that prohibit beer products from promoting their products by offering gifts for every purchase of a certain amount of beer.

As for provisions on the promotion of beer in entertainment venues/food courts, on the condition that buyers will receive lottery coupons if they purchase beer, then this could relate to provisions relating to the sales of beer.

Presidential Regulation 74/2013 regulates alcoholic beverages originating from domestic production or imported origin are grouped into the following classes:[1]

1. Class A Alcoholic Beverages, namely beverages containing ethyl alcohol or ethanol (C2H5OH) with levels of up to 5%;
2. Class B Alcoholic Beverages, namely beverages containing ethyl alcohol or ethanol (C2H5OH) with levels of more than 5% up to 20%; and
3. Class C Alcoholic Beverages, namely beverages containing ethyl alcohol or ethanol (C2H5OH) with levels of more than 20% up to 55%.

Alcoholic beverages may only be traded by business actors that already secure a license to trade alcoholic beverages in accordance with the above classification from the minister who organizes government affairs in the trade sector.[2]

The following provisions address the sale of alcoholic beverages:[3]

1. Class A, B, and C alcoholic beverages may only be sold at:

1. hotels, bars, and restaurants that meet the requirements in accordance with the laws and regulations in the tourism sector;
2. duty-free shops; and
3. certain places other than letters a and b which are determined by the Regent/Mayor and Governor for the Special Capital Region of Jakarta, provided that the said place is not adjacent to places of worship, educational institutions, and hospitals.

 

2. Class A alcoholic beverages may also be sold in retail stores in packaged form;
3. Sales of alcoholic beverages are to be conducted separately from other goods for sale.

The alcoholic beverage sales are further regulated in Regulation of the Minister of Trade Number 20/M-DAG/PER/4/2014 of 2014 on Control and Supervision of Procurement, Distribution, and Sales of Alcoholic Beverage (“Regulation of the Minister of Trade 20/2014”), and its amendments.

According to the Regulation of the Minister of Trade 20/2014, the sale of alcoholic beverages for on-site drinking can only be sold at:[4]

1. Hotels, restaurants, and bars in accordance with the laws and regulations in the tourism sector; and
2. Other certain places as determined by the Regent/Mayor and Governor for the Province of the Special Capital Region of Jakarta.

Furthermore, retail sale of alcoholic beverages may only be sold by retailers, at:[5]

1. Duty-free shops;
2. Other certain places as determined by the Regent/Mayor and Governor for the Special Capital Region of Jakarta;
3. Class A alcoholic beverages may also be sold in supermarkets and hypermarkets.[6]

Retailers are required to place alcoholic beverages in special or separate locations and not at the same place as other products.[7] In addition, it should also be noted that retailers or direct sellers are prohibited from trading alcoholic beverages in locations or locations adjacent to:[8]

1. youth centers, street vendors, terminals, stations, small kiosks, youth inns, and campgrounds;
2. places of worship, schools, hospitals; and
3. other certain places which are determined by the Regent/Mayor or Governor of the Special Capital Region of Jakarta for the Province of the Special Capital Region of Jakarta, by taking into account the conditions of their respective regions.

Sales of alcoholic beverages may only be granted to consumers who are 21 years old (minimum age) or older by presenting an identity card to the officer/salesperson.[9]

This means that it is permitted to sell alcoholic beverages in entertainment venues or food courts as long as they comply with the requirements above and business actors must also secure licenses to trade alcoholic beverages.

Beer Promotion and Donation to Orphanage

In relation to the promotion of beer, it should also be noted that registered importers of alcoholic beverages (Importir Terdaftar Minuman Beralkohol/ "IT-MB"), distributors, sub-distributors, direct sellers, and retailers are prohibited from advertising alcoholic beverages in any mass media.[10]

This means that promotions should not be conducted in mass media, however, if they are promoted in entertainment venues or food courts, then this is allowed.

If IT-MB, distributors, sub-distributors, direct sellers, and retailers advertise alcoholic beverages in the mass media, then they may be subject to administrative sanctions in the form of revocation of stipulation as IT-MB, Alcoholic Beverages Trading Business License, and Class A Alcoholic Beverages Retailer Certificate, and Class A Alcoholic Beverages Direct Seller Certificate and/or technical license.[11]

Regarding the donation of a certain amount from the purchase of beer products to an orphanage, for example, if the orphanage is in the form of a foundation, then the provisions shall refer to the regulations on the assets of foundations as stipulated in Law Number 16 of 2001 on Foundations ("Law 16/2001") and its amendments.

Article 26 Law 16/2001 regulates the assets of foundations namely:

1. The assets of a Foundation shall be derived from a number of separated assets in the form of money or goods.
2. Other than the assets as referred to in Section (1), the assets of Foundations may be obtained from:

1. non-binding donations or aids;
2. waqf;
3. grants;
4. testament grants; and
5. other acquisitions that do not conflict with the Articles of Association of the Foundation and/or the prevailing laws and regulations.

 

3. In the event that the assets of the Foundation originate from waqf, then the provisions of the law of waqf shall apply;
4. The Assets of the Foundation as referred to in Section (1) and Section (2) shall be used to achieve the purposes and objectives of the Foundation.

Furthermore, the Elucidation of Article 26 Section (2) Letter a Law 16/2001 stipulates that non-binding donations or aids are donations or voluntary assistance received by foundations, either from the state, the community, or from other parties that are not contradictory to the applicable laws and regulations.

Therefore, it is not prohibited if the donation given to an orphanage in the form of a foundation is taken from the proceeds from the sale of beer, as long as the donation is not binding and does not conflict with the law.

These are the answers we can provide, we hope you will find them useful.

Legal Basis:

1. Law Number 16 of 2001 on Foundations as amended by Law Number 28 of 2004 on Amendment to Law Number 16 of 2021 on Foundations;
2. Presidential Regulation Number 74 of 2013 on Control and Supervision of Alcoholic Beverage;
3. Regulation of the Minister of Trade Number 20/M-DAG/PER/4/2014 of 2014 on Control and Supervision of Procurement, Distribution, and Sales of Alcoholic Beverage, as amended by Regulation of the Minister of Trade Number 72/M-DAG/PER/10/2014 of 2014 on Amendment to the Regulation of the Minister of Trade Number 20/M-DAG/PER/4/2014 of 2014 on Control and Supervision of Procurement, Distribution, and Sales of Alcoholic Beverage, as amended for the second time by Regulation of the Minister of Trade Number 06/M-DAG/PER/1/2015 of 2015 on Second Amendment to the Regulation of the Minister of Trade Number 20/M-DAG/PER/4/2014 on Control and Supervision of Procurement, Distribution, and Sales of Alcoholic Beverage, as amended for the third time by Regulation of the Minister of Trade Number 32/M-DAG/PER/5/2016 of 2016 on Third Amendment to the Regulation of the Minister of Trade Number 20/M-DAG/PER/4/2014 on Control and Supervision of Procurement, Distribution, and Sales of Alcoholic Beverage, as amended for the fourth time by Regulation of the Minister of Trade Number 47 of 2018 on Fourth Amendment of Regulation of the Minister of Trade Number 20/M-DAG/PER/4/2014 of 2014 on Control and Supervision of Procurement, Distribution, and Sales of Alcoholic Beverage, as amended for the fifth time by Regulation of the Minister of Trade Number 120 of 2018 of Fifth Amendment of Regulation of the Minister of Trade Number 20/M-DAG/PER/4/2014 of 2014 on Control and Supervision of Procurement, Distribution, and Sales of Alcoholic Beverage, as amended for the sixth time by Regulation of the Minister of Trade Number 25 of 2019 of Sixth Amendment of Regulation of the Minister of Trade Number 20/M-DAG/PER/4/2014 of 2014 on Control and Supervision of Procurement, Distribution, and Sales of Alcoholic Beverage.

 

---

[1] Article 3 Section (1) Presidential Regulation Number 74 of 2013 on Control and Supervision of Alcoholic Beverage (“Presidential Regulation 74/2013”).

[2] Article 4 Section (4) Presidential Regulation 74/2013.

[3] Article 7 Presidential Regulation 74/2013.

[4] Article 14 Section (1) Regulation of the Minister of Trade Number 20/M-DAG/PER/4/2014 of 2014 on Control and Supervision of Procurement, Distribution, and Sales of Alcoholic Beverage (“Regulation of the Minister of Trade 20/2014”).

[5] Article 14 Section (3) Regulation of the Minister of Trade 20/2014.

[6] Article 14 Section (3) Regulation of the Minister of Trade Number 06/M-DAG/PER/1/2015 of 2015 on Second Amendment to the Regulation of the Minister of Trade Number 20/M-DAG/PER/4/2014 on Control and Supervision of the Procurement, Distribution, and Sale of Alcoholic Beverage (“Regulation of the Minister of Trade 06/2015”).

[7] Article 16 Section (1) Regulation of the Minister of Trade 20/2014.

[8] Article 28 Regulation of the Minister of Trade 20/2014.

[9] Article 15 Regulation of the Minister of Trade 20/2014.

[10] Article 30 Regulation of the Minister of Trade 20/2014.

[11] Article 48 Regulation of the Minister of Trade 20/2014.