Potential Impact of Standardized Tobacco Packaging on Indonesia Industry

Dec.24.2024

Indonesian Industry Ministry warns standardized tobacco packaging may worsen illegal tobacco circulation, affecting legal industry and revenue.

According to Okezone's report on December 23, the Indonesian Ministry of Industry revealed that standardizing tobacco product packaging could potentially exacerbate the circulation of illegal tobacco. Due to the lack of distinctiveness in uniform packaging, the market share of legal products may gradually be eroded, leading to a domino effect on the entire industry.

The Director of the Ministry of Industry for the Beverage, Tobacco, and Stimulant Industry, Merrijantij Punguan Pintaria, stated that ...

Standardizing tobacco packaging can make it easier for illegal cigarettes to circulate, as the packaging looks the same and it is more difficult to distinguish between legal and illegal cigarettes. This could further weaken the performance of the legal tobacco industry. If not controlled, the circulation of illegal cigarettes could undermine company revenue, job creation, and raw material consumption.

The Indonesian Ministry of Health is currently drafting the "Regulation of the Minister of Health on the Safety of Tobacco Products and E-cigarettes" required by Government Regulation No. 28 of 2024. Standardized packaging is included as part of the draft "RPMK Tobacco Regulation".

Mai Li also pointed out that illegal tobacco not only threatens the survival of the industry but could also lead to a reduction in national tax revenue.

Additionally, tobacco tax revenue has been below target in the past year. In 2023, tobacco tax revenue was 213 trillion Indonesian rupiah (131 billion dollars), falling short of the target of 227.21 trillion rupiah (140 billion dollars) set in the 2023 fiscal budget.

The Director of the Communication and Community Services Department of the Ministry of Health, Siti Nadia Tarmizi, responded that the Ministry of Health is internally coordinating the implementation of the "Health Government Regulations," including the still pending "RPMK Tobacco Regulations.

References:

[1] Kemenperin: Standardisasi Kemasan Picu Kenaikan Rokok Ilegal : Okezone Economy

Also Read:

[1] Indonesia’s New E-cigarette Rules Spark Industry Controversy

[2] The Indonesian Vape Consumer Association opposes unlabeled e-cigarette packaging

[3] Indonesia's plain packaging rule for e-cigarettes sparks controversy

[4] Criticism Mounts Over Indonesia's Tobacco and E-Cigarette Regulations

[5] Discussion on Indonesia's No-Brand Tobacco Packaging Policy Underway

#Traditional tobacco #Asia #Regulation #Indonesia

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