Standardised Tobacco Packaging Could Have Negative Impact, Here's the Explanation

Permata Bank Chief Economist Josua Pardede has stated that packaging and visual design are crucial identities for consumer products, serving as a brand differentiator. When colours and visual appearances are standardised, the distinguishing power between brands will weaken, and business competition will shift from quality to a price war. He made these remarks in response to the Ministry of Health’s discourse on drafting a Minister of Health Regulation concerning the standardisation of packaging for tobacco and electronic cigarette products. The regulation, which mandates standardised packaging for tobacco and e-cigarette products, has drawn a wave of criticism from business actors as well as industry and economic observers. Josua conveyed that on a larger scale, the regulation essentially has the potential to trigger new economic shocks, which would have a systemic impact on the industrial supply chain and state revenue. “Indonesian consumers are very price-sensitive. If the price of legal products remains high due to excise burdens while their appearance is made uniform with quality that is difficult to distinguish, consumers will tend not to quit smoking, but rather migrate to cheaper or even illegal products,” Josua said in a statement on Tuesday, 30 June 2026. He also reminded the government to be cautious in blindly adopting claims of plain packaging success from developed countries. According to him, success in developed nations occurred within a different ecosystem, featuring stronger law enforcement, controlled distribution chains, and higher public purchasing power. One example cited by the government is Australia. In reality, nicotine consumption from illicit sources has actually risen significantly. “In Australia, data from the Bureau of Statistics (ABS) shows nicotine consumption from illicit sources soared from 12 percent in 2017 to 80 percent in 2025,” he stated. Josua explained that this surge was triggered by the price difference, with legal product prices tripling due to high excise duties compared to stable illicit product prices. Indonesia potentially faces a similar risk if the loss of visual appeal instead drives consumers to switch to the cheaper black market.