The crackdown has sent shockwaves through the sector and prompted calls for reform of import rules, which industry sources say are outdated and only encourage illegal imports.
A Ministry of Commerce team raided Quarto Products in late October because it believed the company was illegally importing food and beverage items, said U Thein Htun Oo, a director in the Ministry of Commerce’s Department of Commerce and Consumer Affairs. It has since charged the company’s managing director, who is facing a three-year jail term, he said.
“We believe that [Quarto] may be the illegal [wine] distributor for the whole local market,” he said. “They could not show us the documents of import declarations.”
He alleged that Quarto imported the wine through Tharapa and Bay of Bengal resorts. A surprise check by a mobile customs team uncovered “many” bottles of wine in three 1600-square-foot warehouses, he said, and the company could not produce documentation showing the wine had been legally imported.
The company was forced to temporarily close following the raid and said in a letter to customers on October 29 that “due to a government audit we are not able to arrange delivery today. We are very sorry for this short notice and for any trouble this may bring to your operation.” The following day Quarto told customers that the audit “will be completed by today and we should be able to resume deliveries by tomorrow”. The company is yet to resume operations and declined to comment for this article.
Quarto’s problems were evident at the MyanFood’13 exhibition, held at Yangon’s Tatmadaw Hall from November 6 to 8. Although it was a “gold sponsor” of the event, the company’s booth sat empty, with a Heineken label hastily covered by a sheet of white paper. A number of customs officials attended the exhibition, checking documentation for stock imported for the event.
A spokesperson for a freight forwarding company involved in organising the exhibition said Quarto’s empty booth and pavilion came as a “surprise”.
“They said that they could not display due to authorities confiscating their goods and sealing their product warehouse,” she said, adding that no stock had been confiscated from the 22 international exhibitors who took part in the exhibition, as they all were able to provide import documents to the authorities at the time of the spot checks.
“Now the Myanma Customs and the Ministry of Commerce have a mobile team consisting of police that can check everywhere – surprise checks.”
It remains unclear why only Quarto Products has been targeted by customs officials, who say they were acting on media reports and information from their marine investigation team. The threat of audits and possible criminal charges has, however, prompted a number of other wine distributors to temporarily close their doors. While several distributors refused to speak on the record, one told The Myanmar Times last week that there was “confusion in the market ... no one knows what is happening”.
“We understood there would be some regulation change but this definitely caught everyone by surprise,” said the source. “Everyone just wants to see some proper regulations put in place.”
While widely available, existing Myanmar laws effectively ban the importation of wine and other types of alcohol. Only hotels and duty-free shops are allowed to bring alcohol and cigarettes into the country. The restrictions, which date back several decades, have been criticised for encouraging illegal imports.
To get around the ban, some businesses have been known to collaborate with hotels to import additional alcohol products that are then sold to restaurants and retailers – as Quarto is accused of doing – while others simply import through illegal channels.
While the practice is no longer thought to occur, embassies were rumoured to have imported significant quantities through diplomatic channels in the 1990s that were then sold through local distributors.
Quarto is one of just a handful of major wine suppliers, along with City Mart’s wholesaler subsidiary, Premium Distribution.
U Sonny Aung Khin, the owner of Padonmar restaurant in Yangon and a senior member of the Myanmar Restaurants Association, said the crackdown meant many restaurants were struggling to get fresh supplies of wine.
“There’s a shortage now because [many distributors] are closed temporarily. Even some of the small shops that you see all over the city are closed,” he said.
In an effort to bring about reform to import rules, the Union of Myanmar Federation of Chambers of Commerce and Industry met with related associations and stakeholders to discuss the issue on November 12.
“Our affiliated associations, our members, they have the idea [that alcohol] imports should be allowed. Even though [Myanmar] doesn’t allow it, there are a lot of products flowing in. This increases the cost [of alcohol] and there are also a lot of fake products,” UMFCCI general secretary U Moe Myint Kyaw told The Myanmar Times.
“Legalising imports will allow us to control the quality ... We are losing [tax] revenue as well. If we legally allow [imports], that problem can be solved.”
source: The Myanmar Times
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