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Coca-Cola Amatil Indonesia, one of the leading companies in the carbonated beverages and fruit juices industry in Indonesia, is optimistic that its sales in Southeast Asia's largest economy will grow by double-digit figures in 2018. This would be a great performance considering the light beverages market of Indonesia actually contracted in 2017.
Worldwide famous brand Coca Cola strengthened its presence in Indonesia by opening a USD $30 million production line in Bekasi (West Java). The new production line is owned by Coca Cola Bottling Indonesia, the local unit of Coca-Cola Amatil (CCA). The latter is the largest bottler and distributor of ready-to-drink beverages in the Asia-Pacific region, and one of the largest bottlers of The Coca Cola Company. CCA operates in Australia (where its headquarters are based), New Zealand, Indonesia, Papua New Guinea, Fiji and Samoa.
The government of Indonesia proposes to impose an excise tax of at least IDR 200 (approx. USD $0.02) on plastic bottles and packaging. This proposal is part of talks about revisions to the 2016 State Budget (APNB-P 2016). Later this week, the government will discuss the matter with Indonesia's House of Representatives (DPR). Around the globe several countries (including Great Britain and India) have imposed such an excise tax on plastic bottles and packages, both for additional tax revenue and as a measure to protect the environment.
When the government of Indonesia banned the sale of alcoholic beverages in minimarkets and kiosks in early 2015 in an effort to “protect the morals and culture of Indonesian society”, it came as a shock to alcoholic beverage producers. Although alcoholic drinks are still allowed to be sold in the larger supermarkets, restaurants, cafes and hotels, sales of beer plunged as the beverage was banned in the (estimated) 70,000 minimarkets that have become a very popular shopping place in the urban areas of Indonesia.
The plan of Indonesia's government to set an excise tax of between IDR 2,000 and IDR 3,000 (approx. USD $0.18) per liter on carbonated (soda) drinks met fierce resistance from several institutions. Based on Indonesian law, consumption of goods that have a negative impact on consumers' health or the environment need to be controlled and monitored. The Soft Drinks Industry Association (Asrim), Indonesian Food and Beverage Association (Gapmmi), and Indonesian Employers Association (Apindo) all consider this move to be negative for the country's soft drinks industry.
Indonesian Trade Minister Rachmat Gobel confirmed that the ban on sales of alcohol in minimarkets and kiosks will continue after 16 April 2015. This ban, stipulated by Minister of Trade Regulation No. 06/M-DAG/PER/1/2015 on the Control and Supervision of Procurement, Distribution, and Sale of Alcoholic Beverages (which was signed by the minister on 16 January 2015), prohibits the sale of beverages with an alcohol content ranging between 1 to 5 percent (referred to as type A alcoholic drinks) in minimarkets and kiosks.
The Association of Indonesian Coffee Exporters and Industries (AEKI) expects coffee bean production in Indonesia to decline by about 11 percent to 650,000-670,000 tons in 2014, from 740,000 tons in the previous year. This decline is actually less severe than initially expected as weather conditions have improved in the main coffee bean growing regions on Sumatra. Meanwhile, output in 2015 is projected at 700,000 tons. Indonesia is currently the world’s third-largest coffee bean producer, after Brazil and Vietnam.
One of the world’s leading beverage producers, The Coca Cola Company (TCCC), plans to allocate between USD $600 million and USD $1 billion for business expansion in Indonesia. This investment will be undertaken by TCCC and its Australia-based subsidiary Coca Cola Amatil (CCA). Both companies are eager to tap Indonesia’s lucrative market as Indonesia - Southeast Asia’s largest economy - contains a large population (around 250 million) and shows structural robust economic growth of +5 percent year-on-year.
Japan-based Mitsubishi Corporation (through its subsidiary Atri Pasifik) and Thailand’s Ichitan Group have agreed to construct a soft drinks factory in Indonesia through a fifty-fifty joint venture which will carry the name Ichitan Indonesia. The factory, which requires an investment of IDR 400 billion (USD $34.3 million), will produce various beverages but specifically various ice tea drinks under the Ichitan brand for the Indonesian market. Production at the new factory is expected to commence in 2015.
Sentiments on the global coffee market have turned around completely in 2014 as severe drought in Brazil in combination with high rainfall in Indonesia are expected to result in weak harvests, thereby reducing global coffee production and stockpiles, causing a significant price increase since mid January 2014. Both countries are vital for global coffee production. Brazil accounts for about half of the world's total arabica production, while Indonesia is a significant robusta-type producer.
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Triyono Prijosoesilo, Chairman of the Association of Indonesian Soft Drink Producers (Asrim), said the nation's soft drink sales market contracted in 2017 with the sales volume sliding by 1 percent year-on-year (y/y). It was the first time in his period as chairman that Indonesia's soft drink sales declined.
The next restaurant we visited for our column series about dining in Jakarta was the Penang Bistro. This restaurant, which serves a selection of Malaysian, Singaporean and Indonesian dishes, has seven outlets in Jakarta. The outlet we visited is located in the luxurious Grand Indonesia Shopping Mall, right in the heart of Jakarta and next to the iconic roundabout (known as Bundaran HI). Grand Indonesia is connected to the Kempinski Hotel (previously Hotel Indonesia), one of the most luxurious hotels of Indonesia and a landmark building.
The next restaurant that we visit for our new column series about dining in Jakarta is Din Tai Fung, a Chinese restaurant with eight outlets in Jakarta. When we open the official Indonesian website of Din Tai Fung, we see that the restaurant promotes itself by pointing out several honors it has been given: it was listed among the top 10 restaurants in the world voted by both the New York Times (1993) and the Miele Guide, and its original Tapei branch as well as two Hong Kong branches were awarded a Michelin Star by the Miele Guide in 2010.
For a new column series, Indonesia Investments explores Indonesia's hospitality sector, particularly dining - whether in the context of business meetings or more casual gatherings. In the first installment of this series, we visited all-day dining at Collage in the Pullman Hotel located next to the Central Park Mall in West Jakarta. Pullman is the high-end international brand of the Accor group having 89 hotels and resorts in 24 countries around the globe. Three are located in Indonesia, two in Jakarta (Central Park and Thamrin CBD) and one in Bali.
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