Alcoholic Beverage Companies Required to Obtain Industrial Business Licenses through OSS

To further solidify the regulations on the alcoholic beverage industry in terms of production, import, or distribution of alcoholic beverages in Indonesia, the Minister of Industry has recently issued Regulation 17/2019: Control and Supervision of Alcoholic Beverage Industry.

Regulation 17/2019 replaced the earlier regulations: Regulation of Minister No. 63/M-IND/PER/7/2014 and the amended version Regulation No. 62/M-IND/PER/8/2015 on the Oversight and Control of Alcoholic Beverage Industry.

Regulation 17/2019 addresses matters that include classes of alcoholic beverages, business requirements, such as business alcohol license Indonesia for alcoholic beverage companies, and restrictions for this business in Indonesia.

Classes of Alcoholic Beverage in Indonesia

According to Regulation 17/2019, alcoholic beverages in Indonesia can be categorized into three classes:

• Class A: ≤ 5% ethyl-alcohol or ethanol
• Class B: 5% – 20% ethyl-alcohol or ethanol
• Class C: 20% – 55% ethyl-alcohol or ethanol

Business Alcohol License Indonesia for Alcoholic Beverage Companies

Industrial Business License for Alcohol License Indonesia

There are two major requirements that business owners now need to fulfill in order to operate their alcoholic beverage businesses.

• Alcoholic beverage companies should apply for an Industrial Business License (Izin Usaha Industri – IUI) through the Online Single Submission (OSS) system
• Alcoholic beverage companies must comply with the quality standards of alcoholic beverages.

IUI Issuance

The Minister is responsible for issuing the IUI by considering the following key aspects:

• The Negative Investment List (NIL) under the Regulation 44/2016: The
  List of Business Fields Which Are Closed and Conditionally Open to Investment
• Issuance of IUI is done through the OSS system according to Regulation 24/2018: Electronically Integrated Business Licensing Services

IUI Amendments

IUI amendments can be done by submitting the amendment applications. Issues with regard to IUI that can be submitted for amendments include the following, along with their criteria:

Ownership, name of the company, person in charge

• Including information in the Deed of Establishment

Address of factory

• Including address change when the factory location has not changed

Class of alcoholic beverage

• Current class downgrade
• An increase in production capacity is not allowed
• New class processing methods must use distillation or fermentation technologies

Change of location

• Establishment of new factories
• No increase in production capacity

Companies merging into one location

• The new location comprises a single-factory location
• Built-in capacity is not allowed
• Compliance with a merged built-in capacity

Increase of production capacity

• Companies have known the production capacities under their existing IUI
• The Minister appoints the surveyors to perform the production capability audits
• Must settle the relevant previous excise

Procedure Prior to IUI Amendments

Before submitting any IUI amendment applications, companies that run alcoholic beverage businesses must get the recommendation issued by the Directorate General of Agro-Industry.

The procedure for obtaining the recommendation is shown below:

• Applying online via SIINas (Industrial National Information System) with NIB, IUI, and NPPBKC
• Going through administrative review by the Ministry of Industry. The recommendation application will be passed to the Directorate General after successful review.
• Continuing with substantive review by the Directorate General in five business days. Once approved, the Directorate General will issue the recommendation.

IUI Revocation

Companies will lose their IUI if the following acts are committed:

• Volumes produced are greater than the built-in production capacities stated on IUI
• Classes of alcoholic beverages produced are not covered on IUI
• No production activities for three consecutive years

Quality Standards of Alcoholic Beverages

It is compulsory for alcoholic beverage businesses to meet the quality standards of their products:

Production

• Compliance with classes stated on IUI
• Only food-grade alcohol with a methanol content of less than 0.01% is allowed
• Implementation of Good Processed Food Production Practices (CPPOB)
• Compliance with technical provisions such as product type and class
• Implementation of Indonesian National Standards (SNI) for certain types of alcoholic beverages

Methods of processing

• Utilization of fermentation processes for all classes
• Utilization of distillation processes for Class C only

Restrictions for Alcoholic Beverage Businesses

Companies involved in alcoholic beverage businesses are forbidden to:

• Combine products with non-food-grade alcohol or other harmful substances
• Manufacture products with more than 55% ethanol or ethyl alcohol
• Produce products with a packaging volume of less than 180ml
• Use and store non-food-grade alcohol
• Repackage products

Business Alcohol License Application in Indonesia with InCorp

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