BAT asks Habibie to review cigarette excise ruling<\/p>\n
JAKARTA (JP): Publicly listed cigarettemaker PT British
\nAmerican Tobacco (BAT) Indonesia asked President B.J. Habibie on
\nTuesday to review the Ministry of Finance's decision to raise
\nexcise taxes on the production of regular cigarettes.<\/p>\n
\"We do hope the President will review the regulation,\" company
\npresident Mark Anthony Jennings said following a meeting at
\nHabibie's private residence in Patra Kuningan, South Jakarta.<\/p>\n
Jennings claimed the regulation would harm the profitability
\nof the country's regular, or non-clove, cigarette producers and
\ncould force them to lay off workers.<\/p>\n
In late March finance minister Bambang Subianto issued a new
\nexcise regulation setting minimum retail prices for regular
\ncigarettes and raising excise rates by between 20 percent and 36
\npercent.<\/p>\n
Previously the price limit was only imposed on clove-blended
\nkretek cigarettes, with regular cigarette producers free to set
\ntheir selling prices.<\/p>\n
Despite the domination of the market by clove cigarettes,
\nregular cigarette producers were able to survive by selling their
\nproducts at far cheaper prices.<\/p>\n
Giant clove cigarettemaker Gudang Garam, for instance, sells
\nits products at an average of Rp 2,500 per pack; regular
\ncigarettes for the same market segment sold at between Rp 1,000
\nand Rp 1,500 per pack.<\/p>\n
Under the new regulation, regular cigarette producers have to
\nincrease their banderole prices to the level set by the
\ngovernment, which is about the same level of clove cigarettes.<\/p>\n
Listed on the Jakarta Stock Exchange, BAT is one of the
\ncountry's oldest cigarette producers, commencing operations in
\n1917. It remains one of the market leaders in the regular
\ncigarette sector with brands including Lucky Strike, State
\nEnterprise, Express 555, Kent, Benson & Hedges, Ardath and
\nCommodore.<\/p>\n
Company chief commissioner Selo Soemardjan, who accompanied
\nJennings, said the new regulation was the most burdensome during
\nits long history in the country.<\/p>\n
\"If the government insists on implementing the regulation, we
\nare afraid it would not only harm BAT but the national economy,\"
\nSelo said.<\/p>\n
Selo said the company earlier discussed the matter with
\nconcerned governmental officials, including Bambang and Director
\nGeneral of Custom and Excise Permana Agung.<\/p>\n
Selo said Habibie promised to handle the company's concerns.<\/p>\n
Another cigarette producer, PT Rothman of Pall Mall Indonesia,
\nwith brands including Kansas, also complained over the increase
\nin excise taxes and fixed prices. (prb\/jsk)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bat-asks-habibie-to-review-cigarette-excise-ruling-1447893297",
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