Indonesia to close all airport arrivals shops
By David Hayes , 24 April 2009

The Indonesian government has announced that all duty free arrival shops in airports across the country will be closed from May 24, 2009, as part of what it describes as wider efforts to tackle 'large-scale liquor smuggling'.

Jakarta International Soekarno-Hatta Airport and Denpasar Ngurah Rai Airport in Bali will be the two airports most affected, while other airports also impacted will include Medan International Airport in northern Sumatra and Surabaya International Airport in East Java.

“The Government of Indonesia had just implemented Decree PP32/March 22, 2009 signed by the President of Indonesia banning all duty free shops operating in the Customs Restricted Area at all airports effective from May 24, 2009,” explained John Halim, President Director of duty free operator PT Fortune Star and Chairman of the Indonesian Duty Free Association.

“So from that date there will be no more duty free goods available in the arrival hall at any international airport in Indonesia, but duty free goods still will be available in downtown duty free shops. Recently, customs department officials have cracked down on the huge alcohol smuggling going on in Indonesia market with false duty-paid stickers.”

PT Fortune Star is one of several duty free operators that will be required to close their airport arrival shops in May. The company operates two arrival hall shops of different sizes in Jakarta Airport - one measures 35sq m in area, the other 17sq m. Both sell liquor and cigarettes. Liquor accounts for more than 50% of arrival sales.

Indonesian passengers buy Cognac and whisky in the arrival shops, while Halim says that 'foreign visitors' buy liquor mostly to consume in their hotels. Duty free arrival shop liquor sales have grown in Indonesia in recent years and especially following the tightening of airline security and the difficulties at many overseas airports associated with carrying liquids onto flights and transferring onwards.

Chivas Regal and Johnnie Walker are currently PT Fortune Star’s top selling arrival shop liquor brands, along with Camus Cognac. State Express 555 is the largest selling cigarette brand, although PT Fortune Star also promotes domestic kretek cigarettes which offer a greater margin. Gudang Guram and Sampoerno are the top two kretek brands.

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