Yangon, Myanmar – Hundreds of thousands of tourists flocking to Myanmar this week for the region’s biggest sporting event are likely to discover the country has become a touch dry.

A recent government crackdown on imported goods has emptied most of the country’s shops and hotels of international brands of beer, wine and spirits, lowering the profit expectations of local businesses ahead of the Southeast Asia Games in the capital Yangon.

The 27th SEA Games from December 11-22 are expected to bring in some 800,000 visitors from around the region ahead of the opening ceremonies on Tuesday.

Myanmar’s government has said recent raids on alcohol distributors are part of an effort to stem illegal imports, though the distributors have criticised the move, saying it is part of a systemic lack of transparency within the nation’s trade policies.

“Under the new government, we have liberalised trade for several products, but the illegal trade volumes of wine and spirits in Myanmar has not decreased, it has increased,” Than Aung Kyaw, director of the Ministry of Commerce’s Directorate of Trade, told Al Jazeera on Monday. “With such illegal trade increasing, we have decided to handle it ourselves as it affects government income from tariffs as well as limits our ability to provide consumer protection.”

I think the government needs to resolve this quickly. Now, the supermarkets and shops have taken away all their imported alcohol and that is not suitable for tourism with the SEA Games now here.

- U Naung Naung Han, Myanmar Travel Association

Since 1995, there has been a limited ban in place on imported items such as alcohol, tobacco and certain foods meant to protect local producers. Only select hotels were granted government import licenses, though over the years, retail distributors have piggybacked off these licenses to skirt around the restrictions while the government turned a blind eye.

Distributors without hospitality-industry connections used the long-established black market to acquire stock, which has helped make imported wine and liquor widely available in the past.

Supply and demand

Than Aung Kyaw said the government crackdown would not hurt tourists who want to purchase imported alcohol. “We are allowing some hotels to import wine freely, so this does not seriously affect the current situation,” he said, adding that duty-free shops at the airport would also have imported booze in stock.

Such shops and hotels are few and far between, however, and those still serving imported alcohol are reportedly down to their final bottles.

U Naung Naung Han, general secretary of the Myanmar Travel Association, said with the SEA Games coming, the demand for alcohol will far outweigh the supply. “I think the government needs to resolve this quickly. Now, the supermarkets and shops have taken away all their imported alcohol, and that is not suitable for tourism with the SEA Games now here.”

Business as usual

Alcohol raids began in September after the government opened investigations against distributors in the country suspected of illegally importing goods. As a result, hundreds of thousands of dollars worth of brand name wine and spirits have been confiscated, sparking a country-wide shortage.

The government has passed a series of reforms aimed at normalising business across all sectors since the quasi-civilian government took power in 2011, after more than 50 years of military rule.

According to an official with the Illegal Trade Prevention and Supervision Control Committee, who asked not to be named because he was not authorised to speak to the press, officials in September seized nearly 89,000 bottles of whisky, wine and beer from Yangon distributor Greenline Myanmar Group.

In late October, a ministry taskforce raided the Yangon warehouse of another major alcoholic beverage distributor, Quarto Products, from which 30,000 bottles of wine and 2,400 cans of beer were confiscated. The official added that the ministry suspected the distributor of illegally importing $620,000 worth of wine.

The government last week began investigating the country’s largest distributor, Premium Distribution, which supplies more than half the imported wine in Myanmar. Investigators are looking into how 90,000 bottles of wine and 30 tonnes of foodstuffs made its way to the company’s warehouse in Yangon.

Confiscating 1,000 bottles of wine, the government has forced Premium to suspend all alcohol distribution operations, said a source close to the investigation, who requested anonymity for fear of being prosecuted by the government. The source added that Premium has been unable to import any wine for more than three months, while containers of wine have been left to ruin in the sunlight at Yangon Port.

Barren shelves

After the investigation into Premium began, nervous shops and supermarkets across the capital pulled imported wine and liquor off their shelves, while other retailers closed their shops indefinitely. Only locally produced spirits, which are notorious for their poor quality, are manufactured and remain on shelves.

I was one day too late and now I am down to just one more case of wine. It is a problem for my business.

- Martin Shin, owner of a popular steakhouse in Yangon

The alcohol raids, in which local journalists were encouraged to join, have drawn criticism from service industry representatives who say the government’s import policies are ambiguous.

“There is no clear and transparent trade policy on those items [beer, wine and spirits] and in fact, we’ve been urging the authorities … [to pass a] clear trade policy for many years. However, there has been no action or clear response to what we have voiced out,” said U Win Win Tint, managing director of the country’s largest supermarket chain, City Mart. “Many shops and some other supermarkets have stopped selling these items and we decided to stop selling them in all our outlets.”

With supermarkets pulling alcohol stock from its shelves and wine shops shut down, restaurants are now also starting to feel the pinch.

Martin Shin, owner of Onyx, a popular steakhouse in Yangon, said news of the alcohol shortage last week prompted him to try to stockpile red wine, his best-selling beverage, but he was unable to reach his distributor, Premium, in time.

“I was one day too late and now I am down to just one more case of wine,” he said, adding that he has been unable to locate wine anywhere else in the city.

“It is a problem for my business. There is no regulation in place for any of this,” he said.

Link: http://www.aljazeera.com/indepth/features/2013/12/bone-dry-myanmar-2013129121011404800.html?