Future of hand-rolled kreteks questioned

Sales of hand-rolled clove cigarettes in Indonesia are losing their edge as consumers shift to machine-made products – a situation that could see further job losses in the industry, according to a story in The Jakarta Post.

The market share of hand-rolled kreteks has fallen from 32.80 per cent in 2009 to 26.07 per cent at present, while the share of machine-made kreteks has risen from 59.24 per cent to 66.20 per cent.

This year, producers expect sales of hand-rolled products to increase by one per cent, below the four per cent estimated for sales of all types, according to the Association of Indonesian Cigarette Producers (GAPPRI), which represents clove-cigarette manufacturers.

Last year, sales of hand-rolled kreteks amounted to 90.09 billion, according to excise tax data submitted by the industry.

“This situation may ring an alarm bell for producers, leading them to wonder whether production of hand-rolled cigarettes can be sustained,” GAPPRI secretary-general Hasan Aoni Aziz was quoted as saying.

The question mark surrounding the survival of hand-rolled kreteks recently entered the spotlight when Indonesia’s largest cigarette maker, Sampoerna, decided to close its factories at Lumajang and Jember, East Java.

And Hasan added that more companies could close their operations unless there was a policy of maintaining different excise duties for hand-rolled and machine-made products.