Sunday, August 20, 2017

Foreign wine imports to hit Myanmar’s shelves

Wine suppliers are distributing foreign brands into the local market legally for the first time after the Ministry of Commerce opened the door to imported wine earlier this year, though only a handful of companies have so far been licenced, industry sources said.

DTR Company has been importing wine since October. Photo: Thiri Lu / The Myanmar TimesDTR Company has been importing wine since October. Photo: Thiri Lu / The Myanmar Times

U Tin Ye Win, a commerce ministry director in Nay Pyi Taw, said three or four companies have been granted licences, and several more are in the process of applying, but have not yet met all the requirements.

Premium Distribution Company has been importing wines from South Africa and Italy since late November and Loi Hein Group has been granted an exclusive licence to import Thailand’s Spy wines. “These suppliers are well-experienced and will influence the whole market,” U Tin Ye Win said.

Further liberalisation will depend on whether wholesalers buy wine imports from the official suppliers, or choose to continue selling cheaper illegal imports, he added.

Shops are not allowed to sell foreign-made liquor under the current laws. While large supermarkets stick to the rules, smaller shops sell a range of illegally imported foreign brands, such as Johnnie Walker. If sellers switch to legal wine imports, officials may soon allow foreign liquors to be distributed, U Tin Ye Win said.

The commerce ministry also needs to discover which companies have been dodging taxes by, for example, paying for 100 bottles but importing 100,000. However, it remains hard to keep track of the exact number of bottles entering the country, he said.

A Ministry of Commerce notification in March said importers must register for a company trading licence and must have a dealership.

This means they must first secure their licence and then contract a dealership with one or more foreign wine companies, before applying for an FL11 licence from the General Administration Department. This licence allows distribution of foreign liquor brands, which are taxed at 82 percent – 30pc customs duty, 50pc commercial tax and 2pc income tax.

Importers must pay tax on every bottle, and ensure that ingredients are displayed in English. They can only import by sea or air – not by land – and must declare the country of origin. Suppliers must also ensure that products are Food and Drug Administration-approved, and have a certificate of free sale from the Ministry of Commerce, industry sources said.

Beyond the big suppliers, DTR Company was set up last April specifically to apply for a wine licence, and has been importing French wines since October. Managing director Ko Thiha Sitt said the company distributes six wine brands for K10,000 to K30,000 a bottle to wholesale, retail, bar, hotel and restaurant markets in Yangon and Mandalay. The company plans to expand to other tourist hotspots in the near future.

"I understand that this will take some timeas we are in the period of transition, but strongly believe that the government will take serious action on illegal importations,” he said. 

In the past, the Myanmar Customs Department has held auctions of confiscated products at a discount to licenced products and revenues went to the Internal Revenue Department.

Now the auctions are a thing of the past, and officials say they are toughening up. New tax labels are more secure, and tear as soon as the bottle is opened, he said. In addition, a unique code is printed on the labels of licenced importers.

It was easy to re-use the old-style tax labels, by peeling them off and sticking them to new bottles, and people made money by collecting labels and selling them to wholesalers and retail outlets, said Ko Thiha Sitt. “We can now guarantee our products, so customers can’t complain,” he said.