Daily Management Review

Indonesia's Big Tobacco Slammed By Anti-Smoking Groups For Veiled Marketing


08/02/2017




Indonesia's Big Tobacco Slammed By Anti-Smoking Groups For Veiled Marketing
The promotional strategy of giving retailers cash rewards, shopping vouchers and even money to renovate, anti-smoking groups in Indonesia have slammed Big Tobacco. They have also urged the authorities to enforce advertising curbs to safeguard public health.
 
Including a ban on tobacco firms promoting their products while acting as a sponsor, a national regulation in place to restrict cigarette advertisements is in place in the country with one of the highest smoking rates in the world. But enforcement of it be regional authorities is inconsistent.
 
The anti-smoking groups said that by tying up with small retailers and rewarding them for in-store promotion of products, cigarette makers are making the most of this.
 
A study by the Indonesian Public Health Association (IAKMI) shows that partnership with 513 shop-owners in four cities surrounding Jakarta, had bene struck by Philip Morris-controlled PT Hanjaya Mandala Sampoerna Tbk, PT Gudang Garam Tbk and Djarum Group by mid-2016.
 
IAKMI said that following a move by the Jakarta governor two years ago to ban all cigarette advertising on outdoor media, cigarette companies have stepped up "veiled promotions".
 
"Their grip will take root even more, and the consumption of cigarettes will spread," said Widyastuti Soerojo, head of IAMKI's tobacco control unit.
 
Lisda Sundari, head of the Lanterns for Children Foundation said that children are m made extremely vulnerable as cigarette advertisements are often found at small shops near schools.
 
Anti-tobacco activists were fired up around seven years ago after a shocking video of a toddler reportedly puffing up to 40 cigarettes a day on the island of Sumatra went viral. The incident underscored the problem of underage smoking in Indonesia, said the activists.
 
Data from Euromonitor International shows that with 316.1 billion sticks sold last year, Indonesia's cigarette market was the second-biggest in the world after China despite rising anti-smoking sentiment in the country of 250 million people.
 
There were no comments from Gudang Garam, Djarum and Sampoerna.
 
While its market share fell to 32.8 percent from 33.4 percent, the overall cigarette market in Indonesia dropped 11.6 percent in the second quarter from a year earlier, said Philip Morris, Sampoerna's parent company.
 
Partly responsible for the drop was tax-driven price increases, the U.S. cigarette giant said.
 
"We are being pressured from all sides: rising excise taxes, a not-so-good economy, anti-tobacco movement," said Muhaimin Moeftie, chairman of the association of Indonesian white cigarette producers. Regulations should give the industry "room to breathe", he added.
 
A senior official at the finance ministry said that aimed at controlling consumption and distribution, following an 11 percent hike in 2016, the decision to raise cigarette excise taxes by an average of 10.5 percent this year was  taken.
 
"The government is concerned about production, we hope production of cigarettes will gradually drop," said Heru Pambudi, director-general of customs and excise.
 
But health warnings on packs would be cut back and production effectively increased if a bill initiated in Indonesia's parliament were to be passed into law.
 
Since the sector contributes nearly 10 percent of state revenues and employs millions, it would safeguard a vital economic sector, proponents of the bill say.
 
"Don't call us a sunset industry," said Moeftie. "We've been fighting for a long time. The industry must always be there."
 
(Source:www.reuters.com) 






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