Small Tobacco Companies May Stop Production

Source from:  VIVA News 03/29/2012

The government's measures to protect the public's health from the danger of smoking has in a roundabout way destroy home cigarette industry. Provided the many new government regulations, the only tobacco companies that can survive the business are large-scale and multinational producers. "There used to be thousands of kretek cigarette producers. Since 2005, only dozens are left," said Chairman of Kudus Cigarette Companies Society, Hafash Gunawan. According to Hafash, the small-sized kretek cigarette industries are getting harder to operate. The government's regulations on cigarette taxes that are constantly changing and increasingly burdensome have made business difficult. Since 2005, the government has established more specific tobacco regulations. "Now the tax calculation is more specific to per cigarette," he said. Local companies that have joined multinational cigarette companies are more fortunate. They usually survived the regulating conditions because of the larger companies' support. "Nowadays, it is as if the cigarette industry is pitted against the state officials," said Hafash. Amid anti-smoking campaigns, more international-scale cigarette companies are investing in Indonesia. These companies started business in Indonesia by controlling the existing small-scale companies. From the record of Kretek Rescue National Coalition (KNKP), it is revealed that since (Framework Convention on Tobacco Control/FCTC) World Health Organization (WHO) in February 2005, there has been a multinational corporation business expansion of foreign cigarettes into many developing countries. Their measures are taken by expansion of the market, merger, and company acquisition. However, the United States of America, as the WHO headquarters, has yet to ratify the FTCT treaty. To date, the national kretek cigarette industry ecosystem is getting more difficult since the US government issued out a ban against clove cigarettes (kretek) in the U.S. The nation did not ban the distribution of "white" cigarettes. The regulation has forced the Indonesian government to appeal to the World Trade Organization (WTO). However, on Friday, 2 September 2011, WTO decided to reject Indonesia's suit and banned the sale of kretek cigarettes in the U.S., but still allowed the sale of menthol cigarettes. Enditem