Tag: Indonesia

Local studies needed
Indonesia needs more studies conducted by local researchers to reveal the impact of tobacco consumption on the nation’s health and health care costs, according to a story in The Jakarta Post citing an Antara News Agency report.
“We have often talked about the impact of tobacco use in the country, but we are just quoting information and data on the matter from reports by researchers in foreign countries,” said the Health Minister, Nila Moeloek.
Now that the National Health Insurance (JKN) program had been implemented in Indonesia, it was easier for researchers to conduct studies into the impact of tobacco consumption on public health and the healthcare costs involved in treating tobacco-related diseases, she said.
The Healthcare and Social Security Agency data had shown that 20-25 percent of JKN expenditure went to the treatment of non-communicable diseases related to tobacco consumption, such as cardiovascular diseases and lung cancer.
Nila said a study conducted by the Russian government found that the high incidence of tuberculosis in that country was related to alcohol and tobacco consumption.
“It’s probable that our researchers can conduct such a study given the high number of smokers in Indonesia,” she added.
November 24, 2017
Smokers given a voice
The Indonesian Cigarette Consumers’ Society (LKRI), which was formed in Semarang on Tuesday, claims to be the voice of the country’s smokers, according to a tempo.com story.
LKRI’s founders apparently decided that smokers in Indonesia needed a unified voice to help counter the discrimination that was being aimed at them.
In part, that discrimination had manifested itself in the fact that smokers were not covered by state healthcare insurance (BPJS).
The chairman of LKRI, Agus Condro Prayitn, said during the launch of the society that smokers had greatly contributed to the country.
Through them, the government was able to generate Rp135 trillion in cigarette tax.
Nevertheless, smokers received the least attention from the government of any group, accept when it came to discrimination.
Agus said that cigarette excise tax was expected to generate Rp138 trillion by the year’s end, and that the Finance Ministry had decided to raise that Rp148 trillion for 2018.
So the LKRI has urged smokers to fight for their rights as the country’s revenue contributor.
During the launch, human rights activist Hendardi said that cigarettes and smoking were not crimes and, in fact, were hugely helpful to tobacco farmers.
November 23, 2017
Asia’s vapers unite
Vapers and vaping advocates from Asian countries last week gathered in Jakarta, Indonesia, to call on their governments to allow and regulate the use of electronic cigarettes and heat-not-burn (HNB) devices, according to a story by Roderick T. dela Cruz in the Manila Standard.
The 1st Asia Harm Reduction Forum was held at the Shangri-La Hotel, Jakarta, on November 8-9.
Professor Achmad Syawqie Yazid, chief of the Yayasan Pemerhati Kesehatan Publik (Public Health Observer Foundation, YPKP) of Indonesia, which organized the forum, said that almost half of the world’s 1.1 billion smokers lived in Asia, with India and Indonesia having among the biggest populations of smokers globally.
Thousands died each day in these countries due to complications related to smoking, such as heart disease and cancer.
One of the major health problems in Indonesia was caused by its extremely high cigarette consumption. In fact, the smoking rate in Indonesia, where more than 57 million people smoked, was one of the highest in the world.
Despite the best efforts of public health officials in fighting the cigarette smoking epidemic in the region, smoking rates had stopped declining, Yazid says.
“This condition motivates us, public health observers in Asia, to immediately seek for the most efficient solutions to mitigate the risks of burning tobacco,” he said. “Countries in Asia need to take actions.”
Yazid said one of the most efficient solutions was to introduce alternative tobacco products with lower health risks such as nicotine patches, Swedish snus, e-cigarettes and HNB devices.
“In countries that promote the use of electronic cigarettes and heat-not-burn tobacco products such as Japan and the UK, smoking prevalence has been declining at a record speed,” he said.
“In the UK for example, 2.2 million smokers have quit smoking within five years.
“Japan has the world’s fastest decline in cigarette use, since two years ago.
“The US FDA [Food and Drug Administration] just announced this year that its anti-tobacco regulation will be fully geared towards harm reduction while New Zealand Ministry of Health just endorsed this month the use of electronic cigarettes,” said Yazid.
The full story is at: http://thestandard.com.ph/business/biz-plus/251492/asians-seek-less-harmful-alternatives-to-smoking.html.
November 13, 2017
Indonesia to tax e-liquids
Indonesia’s Director General of Customs and Excise, Heru Pambudi, has said that electronic cigarette liquids will be subjected to an excise duty of 57 percent starting in July next year, according to a story on tempo.co.
The imposition of the tax was described as the government’s effort ‘to regulate’ vaping.
“The main ingredient of the vape liquid is tobacco, which is a taxable object according to the Excise Law,” Heru said during a press conference at the Finance Ministry in Jakarta on Thursday. “Its consumption must also be limited.
“The bottom line is that this is done to prevent underage children from misusing this product.”
November 6, 2017
Farmers seek protection
The Indonesian Tobacco Farmers Association (APTI) has urged the government to control leaf-tobacco imports so as to protect local farmers, according to a story in The Jakarta Post.
During a meeting between APTI members from nine provinces and President Joko ‘Jokowi’ Widodo yesterday, the farmer representatives called on the president to allow cigarette companies to import tobacco only if they had absorbed the tobacco produced by local farmers.
“If a company buys a small amount of local tobacco, it has to get only a small import quota,” APTI chairman Agus Parmuji said after the meeting. “If a company buys a large amount of local tobacco, the government can give a larger quota. But it should be no more than 20 percent of its total consumption.”
According to APTI data, leaf imports stood at about 28,000 tons in 2003, but they rose to 90,000 tons in 2010 and to 150,000 tons in 2012, which was about 72.5 percent of local consumption.
The increase in imported tobacco had resulted in a lower absorption of local tobacco and a decline in prices, Agus said.
Local tobacco production had reached 247,000 tons annually with prices varying from Rp45,000 (US$3.31) per kg to Rp350,000 per kg, depending on the quality.
Agriculture Minister Andi Amran Sulaiman said that he would discuss the matter with the Trade Minister Enggartiasto Lukita.
“Actually, we talked to cigarette companies last month and they agreed to buy local tobacco at [a] good … price,” he said.
October 31, 2017
Illegal trade boosted
The Indonesian Cigarette Manufacturers Association (Gappri) has said that tobacco excise hikes during the past three years have resulted in an increase in illegal cigarette trade in Indonesia, according to a tempo.co story.
Gappri’s chairman Ismanu Soemiran was quoted as saying that licit cigarette production had declined in the years following the hikes. “In the past three years, it declined one percent per year,” he said.
“If tobacco excise duty increases next year by 10.04 percent, cigarette production will drop by two to three percent. It would open up even more avenues for illegal cigarette trade.”
In 2010, the illegal cigarette trade was said to have accounted for 6.2 percent of the Indonesian market. That figure rose to 8.4 percent in 2012, 11.7 percent in 2014 and 12.1 percent in 2016.
Ismanu said that another cigarette excise duty increase would make more smokers seek cheaper, illicit cigarettes.
But he said he expected the government to review its plan to increase tobacco excise duty next year.
October 26, 2017
Leaf partnerships sought
Tobacco farmers in Indonesia’s East Java and West Nusa Tenggara provinces have asked the government to expand a partnership scheme between them and tobacco manufacturers, according to a story in The Jakarta Post.
The chairman of the Kasturi Tobacco Farmers Association (APTKI) at Jember, East Java, Abdurachman, said most tobacco farmers were concerned about how the season would turn out despite their having had a good harvest. This was because there was uncertainty about whether their leaf would be absorbed by the industry.
He said a partnership scheme would benefit both parties. For farmers, it would maintain a good selling price while for the companies, it would provide certainty over tobacco supplies.
According to Abdurachman, only 20 percent of the 5,000 ha planted to tobacco in Jember were part of partnership programs with cigarette manufacturers.
Meanwhile, Mukmin, a Virginia-tobacco farmer of North Pijot village in the Keruak district of the East Lombok regency, said he had enjoyed much benefit after joining a partnership program with PT Sadhana Arifnusa in 2016. “Previously, I was often forced to sell my crops at very low prices to avoid greater loss,” he said.
Previously, Agus Wahyudi of the Directorate General of Plantation at the Agriculture Ministry claimed the government had been formulating a partnership scheme that would involve more farmers.
He said that under the scheme cigarette manufacturers would be obliged to purchase local tobacco if they applied for a tobacco-import permit.
September 26, 2017
Tax hikes recommended
Steep increases in cigarette excise taxes, instead of incremental ones, would do a better job of reducing poverty and improving health, according to a story in The Jakarta Globe quoting the director of the University of Indonesia’s Center for Health Economics and Policy Studies (Cheps).
Cigarettes were said to constitute the second largest expenditure after food among the country’s poor, consuming nearly a quarter of their monthly incomes.
The head of Cheps, Budi Hidayat, was quoted as saying that a threefold increase in current cigarette prices would dissuade many from continuing to smoke and would [thereby] allow greater flexibility in the face of fluctuating food prices.
Increasing cigarette prices initially led to a rise in poverty, but after a certain point, the poverty rate started to drop, he said.
A study conducted by the research center found that an increase of more than 112 percent [presumably in cigarette prices] would be sufficient to reduce the poverty level in the country.
However, if the government imposed a 150 percent tax on tobacco, which would increase the average price of a pack of cigarettes to Rp25,000 (US$1.90), two million people would be lifted out of poverty, the study was said to have found.
And, of course, there would be a payback for government revenues. A 150 percent excise tax would add Rp200 trillion to the state coffers over five years.
Budi said that, conversely, the 10.54 percent increase in tobacco excise that the government planned to impose this year would increase the number of people living in poverty by 0.16 percent to 29 million people.
August 29, 2017
Sale confirmed
Indonesian cigarette maker Gudang Garam said in a regulatory filing that it had signed an agreement with Japan Tobacco Inc for the sale of its wholly-owned subsidiary Karyadibya Mahardika and its distributor Surya Mustika Nusantara for US$677 million, which, when combined with the companies’ debt of US$323 million, increased the value of the transaction to US$1 billion, according to a Deal Street Asia story relayed by the TMA.
The acquisition was announced by JT on August 4.
August 9, 2017
JT acquires kretek firms
Japan Tobacco Inc. said today that the JT Group had signed an agreement to purchase all the outstanding shares of the Indonesian kretek company PT. Karyadibya Mahardhika (KDM), and its distributor, PT. Surya Mustika Nusantara (SMN), for US$677 million.
The transaction is expected to be completed during the fourth quarter of the 2017 fiscal year following regulatory clearance.
In setting out its reasons for the acquisition, JT said Indonesia’s cigarette market, which was the second largest, was dominated by kreteks, or ‘clove cigarettes’.
Currently, JT was involved mainly in the conventional cigarette business in Indonesia, it added, and the acquisition would give the group immediate scale and presence on a nationwide level in the kretek sector.
“We are excited to enter the Indonesian kretek market nationwide by leveraging KDM’s supply chain, including procurement and production, as well as SMN’s broad-scale distribution network,” said Mutsuo Iwai, executive vice president and president of the JT Group’s tobacco business.
“This will be an important expansion of our geographic footprint in emerging markets for our future sustainable growth. Notably, this is our first significant acquisition in South-East Asia and an excellent opportunity for us to further develop our business in a thriving region.”
KDM has nine kretek production facilities in Java and sells its products across Indonesia through SMN. The two companies employ about 7,500 people.
“I am confident that KDM’s excellent kretek products and local expertise and SMN’s strong distribution platform, together with JTI’s international know-how, will further strengthen our growth in Indonesia,” said Eddy Pirard, JTI’s president and CEO. “We look forward to welcoming all employees into our organization.”
August 4, 2017