Heineken reaches Indonesian brewing deal

Beer-lovers in predominantly Muslim Indonesia will find Heineken cheaper and more widely available as part of a deal to have the Dutch brew produced locally.

Heineken, which is now only imported into Indonesia, will be produced by the company’s local partner PT Multi Bintang Indonesia starting early next year. Bintang will pay Heineken a royalty of 7.2% of sales. The move must be approved by Bintang’s shareholders at their January meeting.

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.

Bintang, which has its own line of beer and produces Guinness in a similar deal, is hoping the latest venture will boost its sagging profits.