F&B Services’ Compliance in Indonesia: Tending to Clipped Wings

In June 2022, the provincial government of DKI Jakarta executed a joint field inspection by its relevant institution on Holywings Group (HW). HW is famous among F&B services chains specializing in bar businesses.

The Importance of Legal Compliance in F&B Services

Holywings Group held 12 outlets throughout Jakarta. It was then inspected by two offices: the Office of Tourism and Creative Economy (Disparekraf) and the Office of Industry, Trade, Cooperation, and Small Business Enterprise (DPPKUKM).

In the same month, both offices issued joint findings. They found that some of the inspected outlets of their F&B services do not have a verified business license necessary to operate bar business (KBLI 56301) in the Online Single Submission Risk-Based Approach (OSS RBA).

Furthermore, the outlets did not have proper business licenses to conduct direct alcoholic sales of F&B services. In addition, 7 of the 12 outlets also only possessed business licenses to sell alcoholic drinks for takeaway purposes (KBLI 47221).

While the public would expect an administrative warning and fines to be applied to the group, the governor of DKI Jakarta apparently said his final word.

Under Regional Regulation Number 8 the Year 2007 concerning Public Order and DKI Jakarta Governor Regulation Number 18 the year 2018 concerning Implementation Tourism, Anies Baswedan ordered the Municipal Police of DKI Jakarta to close all 12 branches of Holywings effective immediately.

The Aftermath

Their ambitions bring down another dark cloud after recently opening due to relaxed government COVID-19 policy regarding public gatherings. The action by the governor abruptly terminated their F&B services activities. It is worsened with thousands of employees left uncertain of their livelihood due to the termination.

Other regional governments emulated the action of DKI Jakarta’s governor regarding any F&B services of HW Group. Provincial and regional governments in Surabaya, Bogor, Semarang, and Tangerang conducted inspections of their Holywings’ outlets. They discovered legal violations, prompting another wave of outlet closures numbering fewer than 11 branches.

News media raised their concern about this predicament to stir uncertainty in Holywings’ future business prospects in Bali as their largest ongoing branch is under construction. Indonesian news media offered a complementary perspective from the recent Holywings Group’s marketing promotion.

Their out-of-the-box communication strategy resulted in public complaints and inspections by the provincial government of DKI Jakarta. Readers should be able to objectively view that gaps in legal compliance contributed to a loss of company operations and may very well potentially cease it altogether.

How Holywings Group will resolve its F&B services predicament will depend on the legal-business dynamics of the management. The lesson from the current event is that business owners should obtain suitable business licenses and set structured company policies accordingly.

Expedite Your Legal Matters with InCorp

It is imperative to complete all the necessities prior to opening their business or expedite the license procurement process while business is ongoing. Constant communication with local government and critical stakeholders is vital in preserving business sustainability.

To avoid such cases, InCorp Indonesia (an Ascentium Company) provides business license consulting services to new and existing business owners to explore or maintain their presence in the Indonesian market (Jakarta, Semarang, Surabaya, Bali, Batam). Please contact us now to better understand your business in Indonesia.

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