Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Veiled marketing: Anti-smoking groups slam Indonesia's Big Tobacco

Stock MarketsAug 02, 2017 12:44AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. A street vendor counts money as he buys a box of A Mild cigarettes produced by PT HM Sampoerna at a cigarette shop in Jakarta

By Eveline Danubrata and Stefanno Reinard

JAKARTA (Reuters) - Anti-smoking groups in Indonesia have slammed Big Tobacco for promoting sales by giving retailers cash rewards, shopping vouchers and even money to renovate, urging authorities to enforce advertising curbs to safeguard public health.

The country with one of the highest smoking rates in the world does have a national regulation in place to restrict cigarette advertisements, including a ban on tobacco firms promoting their products while acting as a sponsor. But it is inconsistently enforced by regional authorities.

Cigarette makers are making the most of this, tying up with small retailers and rewarding them for in-store promotion of products, the anti-smoking groups said.

By mid-2016, Philip Morris-controlled PT Hanjaya Mandala Sampoerna Tbk (JK:HMSP), PT Gudang Garam Tbk (JK:GGRM) and Djarum Group had partnered 513 shop-owners in four cities surrounding Jakarta, a study by the Indonesian Public Health Association (IAKMI) shows.

Cigarette companies have stepped up "veiled promotions" following a move by the Jakarta governor two years ago to ban all cigarette advertising on outdoor media, IAKMI said.

"Their grip will take root even more, and the consumption of cigarettes will spread," said Widyastuti Soerojo, head of IAMKI's tobacco control unit.

A shop-owner in Tangerang, west of Jakarta, said as a Sampoerna partner he has to follow the company's display requirements for its products and is not allowed to sell other cigarette brands.

In return, Sampoerna has given him free cigarette packs, shopping vouchers, banners and even a million rupiah ($75) to paint his shop, he said, declining to be named as he was not authorised to speak to media.

Cigarette advertisements are often found at small shops near schools, making children extremely vulnerable, said Lisda Sundari, head of the Lanterns for Children Foundation.

A shocking video of a toddler reportedly puffing up to 40 cigarettes a day on the island of Sumatra went viral around seven years ago, firing up anti-tobacco activists who said it underscored the problem of underage smoking in Indonesia.

Despite rising anti-smoking sentiment in the country of 250 million people, Indonesia's cigarette market was the second-biggest in the world after China with 316.1 billion sticks sold last year, data from Euromonitor International shows.

Gudang Garam and Djarum did not respond to requests for comment. Sampoerna did not immediately provide a comment.


Philip Morris, Sampoerna's parent company, said the overall cigarette market in Indonesia dropped 11.6 percent in the second quarter from a year earlier, while its market share fell to 32.8 percent from 33.4 percent.

The U.S. cigarette giant said tax-driven price increases were partly responsible for the drop.

"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.

The decision to raise cigarette excise taxes by an average of 10.5 percent this year, following an 11 percent hike in 2016, was aimed at controlling consumption and distribution, a senior official at the finance ministry said.

"The government is concerned about production, we hope production of cigarettes will gradually drop," said Heru Pambudi, director-general of customs and excise.

But Indonesia's parliament has initiated a bill which if passed into law would cut back health warnings on packs and effectively increase production.

Proponents of the bill say it would safeguard a vital economic sector that employs millions and contributes nearly 10 percent of state revenues.

"Don't call us a sunset industry," said Moeftie. "We've been fighting for a long time. The industry must always be there."

Veiled marketing: Anti-smoking groups slam Indonesia's Big Tobacco

Related Articles

U.S. Senate panel to debate app store reform bill
U.S. Senate panel to debate app store reform bill By Reuters - Jan 17, 2022

WASHINGTON (Reuters) - A U.S. Senate panel is set on Thursday to debate a bill that aims to rein in app stores of companies that some lawmakers say exert too much market control,...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Rony Joe
Rony Joe Aug 02, 2019 5:25AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Tobacco company should be in Indonesia. No matter how and what, due to big employees hired by them.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email