Key growth market for global tobacco firms

JAKARTA: This photograph taken on January 9, 2018 shows an e-cigarette cafe employee (L) vaping with customers. — AFP

JAKARTA: Chain-smoking Indonesia is moving to stub out its booming e-cigarette sector, sparking criticism that the government is siding with giant tobacco firms at the expense of public health. The Southeast Asian nation has one of the world’s highest smoking rates—some 65 percent of adult men smoke—with a pack costing just $2.

Cigarette advertising is everywhere across the vast archipelago which once had the dubious distinction of being home to one of the world’s youngest nicotine addicts—a chain-smoking toddler who made global headlines in 2010. Smoking cessation products are tough to find and Indonesia stands out as a key growth market for global tobacco firms increasingly shut out of countries with tough anti-smoking legislation.

Despite its tobacco-haven status, e-cigarette cafes have been popping up across Indonesia in recent years amid debate over their safety. In response, Jakarta said it will impose a whopping 57 percent tax on non-tobacco alternatives starting this summer. Hasbullah Thabrany, health expert and advisor for the National Commission on Tobacco Control, warned that while customs and excise law required the government to set taxes for such products, it was possible that authorities were using the levy to take sides. He added: “I do believe that the policy sides with the [tobacco] industry.” Rhomedal Aquino, spokesman for the Association of Indonesian Personal Vaporizers, told AFP: “We agree with a tax plan to control consumption, but a 57 percent duty is too high—it will kill a growing industry.” “It will make us look like a killing machine when we’re not,” he added.

Relapse risk

E-cigarettes, which have gained popularity in the last decade, are handheld devices that heat up a nicotine-containing liquid so users can inhale the vapors. The early scientific consensus is that they are likely safer than conventional cigarettes for adults. Indonesia’s trade minister Enggartiasto Lukita set off a backlash from anti-smoking groups in November when he suggested tobacco farmers would be hurt by the fledgling industry, and that those turning to e-cigarettes—also known as vaping—should smoke regular cigarettes instead. “We should turn vapers into conventional cigarette smokers,” he said at the time.

The government’s plans are not welcome news for IT worker Roy Iskandar, a heavy smoker-turned-vaper who is worried about looming price hikes. Iskandar turned to non-tobacco alternatives after numerous failed quitting attempts. “If they impose such high taxes, people who feel healthier after quitting conventional cigarettes like me could relapse,” the 38-year-old said. Indonesia’s customs office said it hopes the big tax hike will make e-cigaretttes unaffordable for children, while the health ministry said it is not sold on the argument that vaping is safe.

“E-cigarettes are just as dangerous and can be even more carcinogenic” than regular cigarettes, said senior ministry official Muhammad Subuh. “We reject both conventional and electronic cigarettes—it’s better to quit smoking altogether. There is no such thing as ‘less dangerous’ when it comes to smoking.”

‘Still addictive’

Jakarta disputes claims the new policy puts economics ahead of public health. But tobacco is big business, contributing some $10.5 billion in taxes annually, while the vaping industy kicks in just $7.5 million, mostly through sales taxes. Local brand Gudang Garam, which makes ubiquitous clove-infused cigarettes, is one of the country’s biggest employers and the two brothers who own rival Djarum top the list of wealthiest Indonesians.

“This is not about siding with one business,” Deni Sirjantoro, spokesman for the Indonesian Customs and Exise office, told AFP. “State income from the vaping sector is not as big as tobacco duties.” Cigarette duties vary with a top rate of 54 percent. But activists says some of the most popular brands are taxed at rates around 35-40 percent—far less than the proposed 57 percent vaping duty. “The tax on conventional cigarettes is not even that high,” said Eqy Riqly, a manager at a vaping cafe in Jakarta.

Public health experts say cigarettes should be slapped with higher taxes, but they don’t necessarily endorse switching to non-tobacco products. Some worry that their “safer” image will create a new generation of nicotine addicts and act as a gateway to traditional smoking. “It is still an addictive substance,” said Hasbullah Thabrany, a public health analyst at the University of Indonesia. “This is going out of the frying pan into the fire. “Imposing higher duties is the most effective method to control consumption people care more about losing money than losing their health.” -- AFP