JAKARTA, July 23 (Reuters) – Indonesia’s tobacco groups pushed back on Thursday against government plans for tougher regulations on cigarette making and marketing, saying the $40-billion industry will be harmed by proposed limits on nicotine and tar content, among others.
The regulations set to be issued by July 26 call for plain packaging of cigarettes and e-cigarettes to blunt their appeal to young people, while setting a maximum limit of 10 mg of tar and 1 mg of nicotine per cigarette and banning additives.
“If these rules are implemented, the industry will collapse,” Henry Najoan, chairman of the Federation of Indonesian Cigarette Manufacturers, told a joint press conference, alongside officials of tobacco supply bodies.
Representatives of industry workers and tobacco farmers at the conference threatened to stage a street protest if the government does not give in to their demand to drop the plan.
The health ministry and the coordinating ministry of human development and culture did not immediately respond to Reuters requests for comment.
Indonesia regulates smoking less than many other countries leading to a prevalence of about 70% among men, among the world’s highest.
While the new rules may reflect global standards, the Indonesian market is different because clove cigarettes, with much higher levels of nicotine and tar, account for 90% of sales, said Edi Sutopo, chair of the Indonesian Tobacco Community Alliance.
The Alliance stressed the importance of the tobacco industry for the Indonesian economy and government finances.
It cited 710 trillion rupiah ($39.6 billion) of economic activities created across the supply chain, employing 6 million workers and farmers, yielding payments of about 300 trillion rupiah in excise and taxes to the government.
Sutopo said most brands in the market could not comply with the proposed nicotine and tar ceilings.
Some additives are common industry practice for production, such as cooling agents used in kretek, as the clove cigarettes are known, and white cigarette manufacturing, along with sugar to retain moisture in kretek, he added.
The packaging rules would encourage sales of illegal cigarettes, Najoan added.
Indonesia’s biggest cigarette makers include Hanjaya Mandala Sampoerna, controlled by Philip Morris International, Gudang Garam, Djarum Group and Bentoel, part of British American Tobacco.
($1=17,910.0000 rupiah)
(Reporting by Gayatri Suroyo; Additional reporting by Stanley Widianto; Editing by Clarence Fernandez)