Jakarta. Illicit cigarette consumption will likely become more rampant among Indonesians if the government proceeds with its plan to mandate standardized packaging on tobacco products, according to an industry association.

The Health Ministry is drafting a regulation that will impose standardized packaging requirements for cigarettes. The proposed rule seeks to mandate all cigarette packs to look similar, be it in terms of design, size, and color.

The Indonesian tobacco industry, which is subject to an ever-increasing excise tariff, is currently struggling to compete against illicit cigarettes. As tobacco becomes more expensive, many Indonesian smokers look for cheaper alternatives, namely untaxed cigarettes. Benny Wachjudi, chairman of the Indonesian Non-Clove Cigarette Producer Association (Gaprindo), also fears that illicit cigarette consumption will soar once the packaging rule enters into force.

“We are not only dealing with the higher excise tariffs but also restrictive policies. This includes the plans for standardized packaging. So every cigarette pack will have the same color and font,” Benny told a forum hosted by B-Universe Media Holdings in Pantai Indah Kapuk 2 on Thursday.  

“This worries us producers. It would make it harder for people to tell the legal cigarettes and the illegal ones apart,” Benny said.

Without the packaging rule, tobacco producers are already facing “unhealthy competition” with illicit cigarette sellers. The production cost of illicit cigarettes is 75 percent less than their legal counterparts as they do not pay taxes, be it excise tax or income tax. “Every 1 percent rise in excise tax will automatically translate to an increase in illicit cigarette smokers at a certain level,” Benny revealed.

Analyst Andry Satrio Nugroho told the same forum that the upcoming packaging policy would only rub salt into the wound of the tobacco industry. He added: “People’s purchasing power is weakening. As cigarette prices go up, the tobacco industry finds it harder to sell its products to customers, and now standardized packaging plans are underway. The tobacco industry is on the decline, and it is about to be under greater pressure.”

According to media reports, industry groups have voiced concern over the standardized packaging plan. Health Minister Budi Gunadi Sadikin claimed in October that the government had consulted with the Indonesian Employers Association (Apindo) when drafting the regulation.

A 2023 Health Ministry survey shows that Indonesia has 70 million active smokers. About 7.4 percent of those smokers are aged 10-18 years. 

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