Indonesia: Dutch brewer Heineken plans to start producing beer in Indonesia, the world's most populous Muslim nation, in a bid to tap the premium segment of the market. "The company plans to produce Heineken beer in its factory under their (Heineken's) supervision. We will pay 7.2 % of sales as a royalty," a statement from PT Multi Bintang Indonesia Tbk, Heineken’s local partner, said on December 16. The move must be approved by Bintang's independent shareholders at their Jan. 14 meeting. It will profitable," said Lodewijk Lockefeer, Bintang's finance director. "Consumers will have more choice and Heineken will be more widely available. It will also be priced at a lower level than before."

Bintang is nearly 76 % controlled by Heineken International B.V. For the first nine months of 2004, Bintang's net profit fell 20.9 percent from the year-earlier period to 60.15 billion rupiah ($6.5 million) despite revenue growing by 25.4 percent. In 2003 it booked a net profit of 90.2 billion rupiah, around 6 percent higher than the previous year, while sales only rose 3.8 percent. Reuters said that Bintang shares were not traded on Thursday; they last traded on Dec. 3 at 42,500 rupiah.

Heineken is now the only imported beer into Indonesia.

The sale and consumption of alcohol is permitted in Indonesia even though most of its citizens follow Islam, which forbids drinking beer, wine and other alcoholic beverages. Indonesia, where beer consumption has been hit by weak purchasing power and fewer foreign tourists due to a string of terror attacks, has a per capita consumption of 0.6 litres a year -- the size of one standard local Heineken bottle -- lower than Malaysia's 10 litres and China's 18 litres.

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