Alcohol ban fuels 7-Eleven closure in Indonesia

PT Modern Internasional, the operator of 7-Eleven convenience stores in Indonesia, has announced the closure of all of its outlets across the country, likely to be the result of an alcohol ban imposed at mini markets, according to a report by Jakarta Post.

A 7-Eleven store in Indonesia (Photo source: Reuters)

From 30 June, all 7-Eleven convenience stores in Indonesia, which totalled 161 at the end of 2016, have been closed. The decision came after the franchise struggled to make profit amid stiff competition and a nationwide ban on the sale of alcohol at mini markets, introduced in the Muslim-majority country in 2015.

The Indonesian government banned alcoholic beverage sales at 16,000 minimarts and 55,000 other small outlets, which have grown to be popular gathering points for youngsters. Supermarkets, hotels and food outlets are still able to sell alcoholic beverages.

The closures come after a 7-Eleven deal with a potential investor fell through, however the chain’s global parent company, Japan’s Seven & i Holdings Co Ltd, has told Reuters that it is continuing its search for an investor and is hoping to reopen its stores in the country.

Although alcohol only contributed about 10% to the total sales of the convenience stores, the alcohol ban was described as “detrimental” to 7-Eleven’s business in the country, said Modern Internasional’s director Henri Honoris.

Other southeastern Asian countries such as Thailand also has strict alcohol sales ban. No alcohol sales are allowed with a 300-metre radius of higher education institutions. Alcohol can only be bought from convenience stories or wine shops between 11am – 2pm and 5pm – midnight.