Tobacco industry stakeholders oppose plain packaging in Health Ministry Reg. Yeah. 28/2024 – Front Row

Franky Sibarani, Vice Chairman of the Indonesian Employers Association (APINDO), stated that the regulatory pressures on the tobacco industry are burdensome for sectors related to tobacco. As a commodity with significant contributions to the nation, APINDO believes the government needs to exercise caution in policymaking and consider Indonesia’s unique socio-economic conditions. In Indonesia, the tobacco industry supports millions of jobs from farmers, workers, traders and retailers to the creative industry. Therefore, policymaking in Indonesia cannot be solely based on practices from other countries without considering local cultural contexts.

“We feel that there are issues in the policy-making process for both GR 28/2024 and the RPMK due to minimal involvement of the industry. This will lead to prolonged contracts. Policymakers should be cautious in issuing regulations that could threaten prolonged contracts,” said Franky in an official statement during a press conference on GR No. 28/2024 and the RPMK at APINDO’s office in Jakarta on Sept. 11.

At the event, Henry Najoan, chairman of the Indonesian Kretek Cigarette Manufacturers Association (GAPPRI), praised APINDO’s efforts to accommodate all aspirations and respond effectively to the grievances of the tobacco industry. GAPPRI emphasizes that the tobacco industry is not just a business but a significant economic and cultural chain.

“The proposal for plain packaging in the RPMK will have serious impacts, as it exacerbates already excessive policies and could lead to a contract in state revenue and employment. Therefore, we firmly reject this regulation,” said Henry.

Henry also agreed with the government on not selling tobacco products to children, as GAPPRI has committed to preventing underage tobacco sales. GAPPRI has adhered to national regulations and maintained its commitment to preventing youth smoking, so these new rules will negatively affect the entire tobacco industry chain.

Benny Wachjudi, chairman of the Indonesian White Cigarette Producers Association (GAPRINDO), highlighted that the tobacco industry has been burdened by various regulations. Despite being an industry with externalities, the tobacco industry has complied with regulations and adhered to regulations, particularly regarding excise duties, which remain a significant source of state revenue, contributing up to 10 percent, or more than Rp 200 trillion.

Benny also noted that the current excise policies have already put a lot of pressure to the industry every year. With GR 28/2024 and the RPMK, the detrimental impact to the industry will be even greater. The industry has already been under pressure from excessive policies, and minimal industry involvement in formulating the zoning restrictions and plain packaging regulations will worsen the situation.

“If the process is flawed, the content will undoubtedly be problematic. GR 28/2024 still contains issues that need re-evaluation, including the 200-meter sales restriction, advertising, and the more concerning aspect of plain packaging regulations that remove brand identity and encourage illegal cigarettes,” he said.

Kusnasi Mudi, secretary-general of the National Tobacco Farmers Association (DPN APTI), stated that restrictive policies on tobacco in GR 28/2024 and the RPMK are a shared problem. Not only the industry but also tobacco farmers are affected as a crucial upstream component of the tobacco industry. These regulations are seen as neglecting the central role of tobacco in agriculture as a high-value crop that supports 2.5 million livelihoods.

“We are very disappointed and object to the derivative regulations being drafted in the RPMK due to the lack of coherence between the government and the tobacco industry. Tobacco is one of the national strategic commodities, but our existence is continually suppressed. We request government protection for the 2.5 million farmers who are also struggling for their livelihoods and facing various other issues,” he explained.

similarly, Sudarto, chairman of the central leadership of the Federation of Tobacco, Food and Beverage Workers Unions of Indonesia (FSP-RTMM-SPSI), condemned GR 28/2024 and the RPMK. Both regulations are seen as discriminatory products due to minimal participation and the lack of facilitation for workers to voice their concerns.

“The government needs to recognize that workers are assets and that we are numerous; we should not be continuously marginalized. One aspect that needs attention is that workers are part of Indonesia’s constitution, and in the eyes of the law, we are equal. It is important to remember that we are a tobacco-producing country and should not be compared with consumer countries,” he added.

The zoning prohibition on the sale and outdoor advertising of tobacco products, as well as the restrictions on tar and nicotine in GR 28/2024, and the proposed plain packaging for tobacco products in the RPMK, are counterproductive and discriminatory to business continuity and the national economy

Indeed, GR 28/2024 and the RPMK also have significant impacts on traders and retailers. Tutum Rahanta, chairman of the advisory council of the Indonesian Retailers and Shopping Center Tenants Association (HIPPINDO), stated that GR 28/2024 and the proposal for plain packaging are highly impractical for all parties involved. Retailers have been complying with prevailing regulations, including the proper placement of tobacco products. Additionally, they are tax-compliant.

“This regulation seriously undermines the tobacco industry at a time when the sector, from upstream to downstream, has adhered to previous regulations. “The government should focus on combating illegal cigarettes rather than interfering with legal cigarettes that comply with the law,” he asserted.

Furthermore, Fabianus Bernadi, chairman of the Indonesian Outdoor Media Association (AMLI), saw another threat from the plain packaging proposal following the prohibition on tobacco product advertising within 500 meters of educational and recreational centers. AMLI has already felt the impact since the drafting of GR 28/2024. They had sent a letter to Health Minister Budi Gunadi Sadikin but received no response.

“From the regions we surveyed, 79 percent of advertisements come from tobacco products, and 86 percent are affected by GR 28/2024, as 50 percent of their revenue comes from tobacco product advertisements. “This regulation should include more education rather than prohibitions, as it will significantly impact us as outdoor media businesses,” he said.

In an effort to collectively voice their concerns, several associations, including manufacturers, tobacco and clove farmers, labor unions, traders/retailers, creative industries, broadcasters and advertisers, have signed a joint statement requesting government protection against the standardization of packaging in the RPMK and various problematic articles in GR 28/2024 that harm multiple parties. The press conference organized by APINDO featured more than 20 cross-industry associations, including GAPPRI, GAPRINDO, FORMASI, APTI, APCI, AMTI, FSP RTMM SPSI, APRINDO, HIPPINDO, APARSI, APPSI, AMLI, ATVSI, IRPII, APROFI, APFI, BPI, AVISI, APKI, APVI, AVI, APPNINDO and ARVINDO.