Gus Dur agrees to review nicotine regulation: GAPRI

Gus Dur agrees to review nicotine regulation: GAPRI

JAKARTA (JP): Following calls from local cigarette producers,
President Abdurrahman "Gus Dur" Wahid agreed on Friday to review
a new regulation on cigarette tar and nicotine levels.

The chairman of the Association of Indonesian Cigarette
Producers (GAPRI), Ismanu Soemiran, told journalists after
meeting with the President that the revision was necessary to
give small cigarette makers a chance to survive.

"The President agreed to revise it, but he said we need to
discuss it with the health minister first," Ismanu said.

Former president B.J. Habibie signed on Oct. 5 Government
Regulation No. 81/1999 which stipulates that each cigarette must
contain no more than 1.5 milligrams of nicotine and 20 milligrams
of tar.

The regulation does not stop there, it also bars cigarette
companies from advertising in the electronic media.

Ismanu said the revised regulation should set different levels
of tar and nicotine for clove-blended cigarettes because clove
cigarettes had a higher nicotine content than regular cigarettes.

It should also, if possible, give a transitional period of up
to 15 years for small cigarette producers to adjust themselves to
the set tar and nicotine levels.

Ismanu said cigarette companies in general were still using
simple technology so the tar and nicotine levels of their
products were still high.

If the regulation is imposed, many cigarette producers will
become bankrupt. This, in return, will create unemployment.

Ismanu noted that the cigarette industry currently provided
employment for 6.4 million people, including 170,000 people
employed directly by cigarette companies, 2.3 million tobacco
farmers, 1.9 million clove farmers, 1.15 million people working
in distribution and another 900,000 people working in other
related services.

Not only it would affect employment, Ismanu said, the new
regulation would also punish the government itself in the form of
lower income from excise tax. If implemented, Ismanu predicted
that it would slash the government's excise income by 50 percent.

The government targets to collect some US$1.5 billion in
excise tax this fiscal year from cigarette sales.

Analysts agreed that the new regulation, if implemented, would
kill especially small-scaled, clove-blended cigarette producers
and would benefit only the machine-rolled cigarette makers, most
of which were giant international cigarette companies.

They said only big cigarette makers had the technology to
control the level of tar and nicotine in their products to meet
the standards set by the government.

Indonesians smoke 202 billion cigarettes per year, almost 90
percent of which are clove cigarettes.

Clove-blended cigarette makers blamed the introduction of tar
and nicotine levels on cigarette on regular cigarettes producers,
especially PT British Tobacco Indonesia (BAT).

The government announced its plan to introduce a new cigarette
excise tax regulation based on tar and nicotine levels in June,
only days after BAT executives met with Habibie.

BAT executives flatly denied the allegation, saying that they
were also shocked when the government revealed its plan in June
to introduce tar and nicotine levels. (rid/prb)