Cigarette Packaging Rules Under Scrutiny Amid Concerns of Potential Layoffs
The government’s plan to regulate the standardisation of packaging colours for tobacco products and electronic cigarettes through a Draft Minister of Health Regulation (RPMK) remains a subject of debate. On one hand, the government states the policy is intended to strengthen the effectiveness of health warnings. On the other hand, various parties believe its implementation must consider the impact on industry, the workforce, and the potential circulation of illegal cigarettes. The Ministry of Industry and the Ministry of Health have even openly disagreed and are not yet aligned on this policy plan.
Indonesian consumers are highly price-sensitive. If the price of legal products remains high due to excise duties while their appearance is made uniform with quality that is difficult to distinguish, consumers will tend not to stop smoking, but rather migrate to cheaper or even illegal products, said Permata Bank Chief Economist Josua Pardede in a statement quoted on Thursday (2/7/2026). He also reminded the government to thoroughly consider the experiences of other countries before implementing a similar policy in Indonesia. The success of packaging regulation policies in several developed countries is inseparable from the support of law enforcement, distribution supervision, and different levels of public purchasing power.
In Australia, data from the Bureau of Statistics (ABS) actually shows that nicotine consumption from illegal sources surged from 12% in 2013 to 80% in 2025. This surge was triggered by the price difference, with legal product prices tripling due to high excise duties compared to stable illegal product prices. Indonesia has the potential to face a similar risk if the loss of visual appeal actually encourages consumers to switch to the cheaper black market, he said.
From an economic perspective, Josua estimates the policy could also put pressure on the tobacco products industry, which has a long supply chain, ranging from manufacturing, packaging printing, distributors, and retail traders to tobacco and clove farmers. Amid a challenging national economic climate, this regulatory uncertainty forces business actors to implement efficiency measures by withholding investment and reducing production. As a result, the risk of mass layoffs among the productive age group increases sharply, he stated.
Previously, the Ministry of Industry stated that in principle it supports the drafting of derivative regulations for Government Regulation Number 28 of 2024 as an effort to provide legal certainty for the business world. However, the ministry requested that provisions regarding the standardisation of colours and font types on cigarette packaging be reviewed. The Ministry of Industry in principle supports the issuance of the PP 28 derivative because this is indeed for business certainty. However, in this case we reject the parts that regulate colour standardisation and font standardisation, said the Director of the Beverage, Tobacco Products and Refreshing Ingredients Industry at the Ministry of Industry, Merrijantij Punguan Pintaria, during an IHT discussion on Friday (26/6/2026).
Meanwhile, the Ministry of Health emphasised that the regulation being drafted is not the implementation of plain packaging. The Head of the Tobacco-Related Disease Control Working Group at the Ministry of Health, Benget Saragih, explained that the regulation only governs the standardisation of packaging colour using Pantone 448C, while brand identity, logos, and font types are still permitted so that products from each company can still be recognised by the public. We at the Ministry of Health are not implementing plain packaging, not plain packaging. Only the colour standard is regulated. Brands and logos remain as they are, so it is only the colour to make the health warnings more effective, said Benget.