Tobacco Documents Online

INDONESIA THE TOBACCOADVISORY COMMITTEE For many years in the past, the cigarette association has been split in the Clove Cigarette Association and the White Cigarette Association. Early this year both associations have agreed in principle to set up the Tobacco Industry Advisory Committee but until today the NrMA only exists in name. There are many reasons why the Clove Cigarette Association is not too keen in the NMA: i. because the MNC's are the leading companies among the. white cigarette manufacturers; 2. the clove cigarette manufacturers already received tax concessions from the Government e.g. excise duty of 27½% for handmade and 35% for machine made cigarettes, whilst the whites which are machine made should pay 40%. The clove cigarettes are allowed to be sold at 15% below their banderole price against the whites which should be exactly at banderole. The high PMWNF and nic. content of clove cigarettes ranging between 45 and 64 against whites between 18 and 24. II. SMOKING ISSUES There is no change in the attitude of the Government on Smoking Issues. W~ite-ups in mass media or the Consumers Association are very sporadic and have not much affect on the puhllc. The probability of the Government to impose warning clauses or league tables are still remote unless urged by WHO or as a solidarity attitude in respect of the ASEAN community. The reasons for the above assumptions are: i. The economic impact that the cigarette industry has in terms of employment and government ~evenue in particular from the clove cigarette industry. 2. That the clove cigarette industry represents 65% of the total cigarette market employing not less than 200,000 workers. 2435 T105390277

page: --2-- 3. The excise revenue is 3% of the total Government income of which approx. 80% comes from the clove cigarette industry. 4. The PMWNF of clove cigarettes plain ranges between 51 and 64 whilst the filtered ones between 45 and 52 and it would be extremely difficult and could be disastrous for the clove cigarette industry to drastically reduce their PMWNF within a very short time. 5. It should also be noted that the Government has encouraged the farmers to grow cloves which is the main ingredients of clove cigarettes. Whilst in 1974 the clove production was 14,000 tons, last year's yield was approx. 45,000 tons. It does not only result in higher income to the farmer, but it also attracts approx. 750,000 labour a day during harvesting time. III. THE FUTURE DEVELOPMENT OF THE TOBACCO INDUSTRY i. Smoking Issues It is difficult to assess future developments, although the assumptions in the previous paragraph are strong indications that the smoking and health issue will not be predominantly exposed. This is also evidenced from the Government plans and actions in the encouragement of tobacco growing and clove cultivation. A couple of companies have set up their own laboratories to monitor PMWNF and nic. 2. Tobacco Growing Intensification projects to improve the quality and the yield of tobacco are subsidised by the Government and cigarette manufacturers are requested to provide extension services to the farmers. The objectives are to improve the income of the farmers and to expand the tobacco exports outside the MEE and U.S.A. 3. Clove Cultivation This was encouraged by the Government in order to be self- sufficient in providing cloves for the clove cigarette industry and also b~cause it is highly labour intensive. TI05390278

page : -3- At the current market growth of clove cigarettes, it is estimated that within the next 20 years, the clove production should be doubled. 16/i0/1981 Har/gl. TI05390279