Tobacco Industry Warns of Rising Illegal Cigarette Trade Amid Plain Packaging Policy

The tobacco industry is concerned that a surge in illegal cigarette circulation could occur if the government proceeds with plain packaging regulations. Industry players estimate that illegal products could dominate the market as consumers struggle to distinguish between legal and illicit cigarettes.

Benny Wachjudi, Chairman of the Indonesian White Cigarette Manufacturers Association (GAPRINDO), stated that standardising packaging with Pantone 448 C could create loopholes for illegal cigarette trade. He noted that even with current varied packaging, illegal cigarettes are already widespread.

“If enforced with uniform colouring, illegal cigarettes are already abundant despite different colours. This is the biggest concern. It’s possible that half of the circulating cigarettes could become illegal, as it would be impossible to distinguish between legal and illicit products,” Wachjudi said on Sunday (31 May 2026).

GAPRINDO reports that illegal cigarettes currently account for 14% of the market, equivalent to 40 billion sticks. The industry fears this situation could worsen if all product packaging is standardised.

Business leaders also criticise the regulation for not being explicitly mandated under Government Regulation No. 28 of 2024, a derivative of the Health Law. Additionally, plain packaging is seen as potentially conflicting with intellectual property laws by erasing product branding.

Amid economic pressures and global uncertainty, the industry is increasingly worried about business continuity and jobs dependent on the tobacco sector.

“Fundamentally, we as business operators always comply with regulations. However, when regulations cannot be implemented, such as this packaging standardisation, how can we survive? Therefore, we request that the regulations be rational, not enforced compulsorily, and in line with the provisions of Government Regulation No. 28/2024,” Wachjudi stressed.

He argued that overly restrictive policies may not effectively reduce smoking consumption. Instead, they risk allowing illegal cigarettes to dominate the market and negatively impact government revenue.

“Strict regulations do not automatically reduce the number of cigarettes sold or the number of smokers. On the contrary, legal cigarette sales decline, replaced by illegal ones, and government revenue also falls,” he added.