Indonesia Country Profile

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Image source: Nathan Hughes Hamilton/CC BY 2.0 DEED

Key Points

  • Indonesia is a country in Southeast Asia, part of the World Health Organization’s South-East Asia Region.
  • It is the fourth most populous country in the world, with a population in 2022 of 275.5 million.
  • Tobacco use prevalence is high, particularly amongst men. 34.5% of all adults were current tobacco users in 2021, including 65.5% of men.
  • Indonesia has neither signed nor ratified the World Health Organization Framework Convention on Tobacco Control. As a non-party, it is ineligible to join the Protocol to Eliminate Illicit Trade in Tobacco Products.
  • The Indonesian tobacco market is dominated by local manufacturers PT Gudang Garam Tbk and PT Djarum, as well as Philip Morris International.
  • Recent tobacco industry tactics in Indonesia include the use of third parties; the targeting of youth with tobacco marketing, both at point of sale and online, as well as via event sponsorship; and sponsorship of popular sports such as badminton and football.

According to the authors of a 2023 paper, “Indonesia has a high smoking prevalence that has not diminished significantly since 1990”. This has been driven by male smoking rates which remain amongst the highest in the world.12 It is the only country in Asia to have neither signed nor ratified the World Health Organization Framework Convention on Tobacco Control (WHO FCTC),3 and nor is there any comparable national framework for tobacco control.1 Industry interference in policymaking is ongoing, as there is no effective legal mechanism to prevent it.45 Smoking has long been a part of Indonesian culture, particularly for men, something which tobacco companies have exploited through aggressive marketing tactics that aim to reinforce smoking as a normal or even essential masculine behaviour.56 This high degree of social acceptability means that the government treats the industry as a legitimate stakeholder.7 One key challenge, therefore, is to de-normalise tobacco use, as part of a comprehensive tobacco control plan.78

Tobacco Use in Indonesia

The link between smoking and masculinity is deeply embedded within Indonesian culture.89 This has been reinforced by tobacco marketing which associates tobacco products with characteristics traditionally considered masculine, such as strength, heroism and self-control.89

In 2021, tobacco use prevalence amongst adults was 34.5%; 70.2 million adults were current users of tobacco.10 Nearly two-thirds (65.5%) of Indonesian men reported using tobacco, compared to around 3% of women.10

In 2019, nearly 20% of students aged from 13 to 15 reported tobacco use.11 Around 36% of males in this age group reported current tobacco use compared to 3.5% of females.11

Kreteks – cigarettes consisting of tobacco, cloves and flavourings such as chocolate, dried fruit and coffee – are by far the most popular tobacco product in Indonesia. According to government figures from 2017, kreteks accounted for more than 95% of the cigarettes sold that year.12 The cloves provide a unique flavour and smell, and also contain eugenol, a chemical compound which reduces the harshness of the smoke.13 In 2021, close to 30% of all Indonesian adults – around 60 million of the country’s 70 million adult tobacco users – reported smoking kreteks.10

There were an estimated 246,000 deaths attributable to smoking in 2019, accounting for nearly 15% of all mortality in Indonesia that year.14 Research published in 2022 estimated the total cost of smoking to the Indonesian economy in 2019 at between Rp184.36 trillion (US$13 billion) and Rp410.76 trillion (US$29 billion).15 The same study found that direct healthcare costs accounted for between Rp17.9 trillion (US$1.3 billion) and Rp27.7 trillion (US$2 billion), most of which is covered by the Social Security Agency for Health, equivalent to 57-59% of total direct expenditure on healthcare.15

Tobacco in Indonesia

Market share and leading brands

In 2022, market research company Euromonitor International put the value of the Indonesian tobacco market at over US$34 billion.16 It is the second-largest cigarette market in the world.17

The market leader in Indonesia is the local kretek manufacturer PT Gudang Garam Tbk (Gudang Garam), with nearly one-third of the market in 2022.1819

Its closest competitor is Philip Morris International (PMI), with a slightly smaller share.18 PMI operates in Indonesia via its subsidiaries PT Philip Morris Indonesia and PT HM Sampoerna Tbk (Sampoerna).1820 At the time of its acquisition by PMI in 2005, Sampoerna was the leading tobacco company in Indonesia.2021

PT Djarum (Djarum), another local kretek producer, has the third-largest market share, around half that of the two leading companies.1822

Like PMI, other transnational tobacco companies have sought to expand into Indonesia by acquiring local companies. In 2009, British American Tobacco (BAT) bought an 85% stake in PT Bentoel Internasional Investama Tbk (Bentoel) – at the time the fourth largest tobacco company in the country.21 In 2011, the South Korean company Korea Tobacco & Ginseng (KT&G) – which has a partnership with PMI for its newer nicotine and tobacco products – bought a controlling share of Indonesia’s sixth-largest tobacco company, PT Trisakti Purwosari Makmur.2123 Similarly, Japan Tobacco International (JTI) acquired two Gudang Garam subsidiaries, Karyadibya Mahardhika and its distributor, PT Surya Mustika Nusantara, in 2017.21 However, BAT, JTI and KT&G each had market shares of less than 2% as of 2022.18

In 2022, the top four brands of cigarette in Indonesia were all kreteks. Gudang Garam has around one-third of the market. Djarum, A Mild and Dji Sam Soe (the latter two both PMI/Sampoerna brands) each have around a one-tenth share. Others, including PMI’s premium cigarette Marlboro, have smaller shares.24

Tobacco farming and child labour

Tobacco is grown in Indonesia almost entirely on small, family-run farms, and 90% of production comes from just three provinces: East Java, Central Java, and West Nusa Tenggara.25

In 2021, Indonesia reported production of over 237,000 tonnes of raw tobacco, making it the fourth largest producer in the world after China, India and Brazil.26 Production has varied since 2010, from a low of less than 127,000 tonnes in 2016 to a high of nearly 270,000 tonnes in 2019. However, the overall trend in recent decades has been upwards, as shown in the graph below:

Figure 1: Tobacco production, 1980 to 2021.27 Source: UN Food and Agriculture Organization/Our World in Data | CC BY

The area harvested under tobacco crop also increased by over 30% between 2000 and 2020, to nearly 220,000 hectares.28

A 2017 report by the World Bank found that poverty was widespread amongst tobacco farmers in Indonesia. Nearly three-quarters of tobacco farmers were poor compared to around one-tenth of the general population.29 Most tobacco-farming households received some form of government social assistance, and more than 60% reported food insecurity.29

Research published in 2020 found that Indonesian tobacco farmers would be better off economically if they grew other crops or pursued alternative, non-agricultural livelihoods.30 Tobacco is also vulnerable to adverse weather conditions in comparison to other crops. In 2016, a period of much higher-than-average rainfall, while non-tobacco farmers made a modest income, tobacco farmers’ income was almost zero.30

Tobacco-farming households had significantly higher labour costs than those growing other crops.31 Tobacco farmers also used child labour, both hired and household, more frequently compared to those growing other crops.30 Similarly, more children from tobacco farms missed school.30 Farmers reported using child labour because tobacco growing does not usually pay enough to hire adult workers.30

An investigation by The Guardian in 2018 visited the village of Beleke, on the island of Lombok, where it found almost all children above the age of four doing tobacco work during harvest season.32 This followed a report by Human Rights Watch (HRW) in 2016, which stated that thousands of children work in tobacco farming in Indonesia. HRW found children engaged in dangerous work in four Indonesian provinces, interviewing more than 130. They reported serious health and safety issues, including acute nicotine poisoning as a result of handling tobacco leaves (also known as green tobacco sickness) and contact with pesticides and other chemicals.25

HRW’s interviews with tobacco farmers and traders revealed a lack of human rights due diligence in the tobacco supply chain in Indonesia, particularly regarding child labour.25 The farmers and traders interviewed supplied large Indonesian and transnational companies including Gudang Garam, Sampoerna, Djarum and Bentoel.25

Tobacco and the economy

Given its high level of tobacco consumption, Indonesia has long been a net importer of tobacco leaf, despite also being a major producer.31 In 2022, it imported over US$617 million in raw tobacco, compared to around US$266 million in exports.3334

However, it is a net exporter of cigarettes: over US$913 million in 2022, compared to US$118 million in imports.3536

In 2020 the WHO reported that the contribution of the tobacco industry to the Indonesian economy was relatively small; tobacco manufacturing generates just 0.6% of total employment, while tobacco farmers represent only 1.6% of the agricultural workforce. Most families involved in tobacco growing and kretek rolling also receive some form of social assistance – meaning that the Indonesian state is essentially subsidising poorly-paid employment in the tobacco industry.37

Illicit trade

A study published in 2019, which collected packs of cigarettes from respondents in Indonesia, found that 20% of the 1,440 smokers surveyed reported ever smoking illicit cigarettes. However, among the 1,201 packs researchers collected, only 20 (i.e. 1.6%) had no excise stamp, a fake excise stamp, or no graphic health warning – and hence were potentially illicit. Price appears to be a factor, with people on lower incomes more likely to purchase illicit cigarettes, though consumption of illicit cigarettes was not found to be a long-term behaviour.38 However, a 2021 study estimated that the share of illicit cigarette consumption in the country increased from 5% in 2013 to 19% in 2018.39

Globally, Free Trade Zones (FTZs) are well known to facilitate the illicit tobacco trade.40 There are four FTZs in Indonesia, where cigarette production and trade are exempted from excise duties, making the price much lower. Cigarettes leak from these FTZs, becoming illicit in the process, as the packs bear no excise stamps.41 In August 2023, Indonesia’s Corruption Eradication Commission announced that a senior official from the Bintan Free Trade and Port Zone had been arrested on charges of data manipulation and receiving bribes from cigarette companies, to allow greater flows of duty-free cigarettes through the zone.42

Internal industry documents suggest that historically, BAT has been involved in illicit trade in Indonesia and the broader region.43 A 1994 internal BAT document points to Indonesia – along with Malaysia – as a conduit of illicit products to the Philippines.44 A BAT-commissioned study from the 1980s also documented Indonesian consumers’ preference for its smuggled products.45

As part of the third round of the Philip Morris International initiative PMI IMPACT, PMI is funding the Institute for Development of Economics and Finance, an Indonesian think tank, to “examine the market for NTHRPs [nicotine and tobacco harm reduction products] and how to prevent illicit trade in this growing sector, with research to include surveys and limited group discussions”.46

Tobacco and the environment

Indonesia is the world’s second-biggest contributor to marine plastic pollution after China, responsible for 1.29 million tonnes of debris entering the ocean annually.47 Of this waste, cigarette butts are the most commonly-littered item.48 The Global Center for Good Governance in Tobacco Control has estimated the cost of tobacco-related marine pollution and waste management in Indonesia at Rp49 trillion (US$3.1 billion) per year.49

Roadmap to Tobacco Control

Indonesia is not a party to the WHO FCTC, and is therefore ineligible to join the Protocol to Eliminate Illicit Trade in Tobacco Products. As of 2023, there appears to be little political will either to ratify the WHO FCTC or to create a comparable national framework for tobacco control. This has led to a fragmented approach across different government departments and prevented the development of coherent tobacco control policies.1

However, Indonesia has committed to an Association of Southeast Asian Nations (ASEAN) five-year plan on health, under which it has pledged to reaffirm collective positions against industry interference and for implementation of control measures, for both tobacco and alcohol.50

In 2009, the passage of Law No. 36 authorised the Ministry of Health to introduce tobacco control regulation, including on tobacco advertising, promotion and sponsorship (TAPS); smoke-free spaces; and packaging and labelling of tobacco products.51 This was followed in 2012 by Indonesia’s principal tobacco control law, Government Regulation 109 (PP 109/2012).51 These laws prohibit smoking on public transport, and in educational facilities and places of worship, though other types of enclosed public spaces, including workplaces, restaurants and government facilities, may provide smoking areas.5253 More stringent regulations at the subnational level are permitted.52 As of June 2023, 456 (around 86%) of Indonesia’s 520 cities and districts had adopted smoke-free policies, though implementation remains a challenge.54

Indonesia is one of the few countries that still permits tobacco advertising on television, though it may not be broadcast until after 9:30pm.5251 While Law No. 36 and PP 109/2012 also introduced graphic health warnings (GHWs) on tobacco packaging and banned misleading terms such as “light” and “low-tar”, the law was not retroactive for tobacco products that already had these words in their branding, and other misleading features – such as colours, numbers and symbols – are still permitted.5251

As of 2024, various other limitations remain. There are no restrictions on internet sales or the sale of individual cigarettes (single sticks); there is no national law regulating the sale, use, advertising, promotion, sponsorship, packaging or labelling of e-cigarettes; and tobacco industry corporate social responsibility (CSR) is still permitted.5153 Cigarettes in Indonesia also remain relatively cheap. In 2022, the price of the bestselling brand of cigarettes was just over US$2.53

In 2018, President Widodo issued a decree containing a list of government regulations to be revised, which included PP 109/2012.55 Tobacco control advocates have seen this as an opportunity to push for stronger regulations, such as larger GHWs, higher excise taxes on cigarettes and a comprehensive ban on TAPS.55 However, this process has stalled, amidst conflict between different government ministries and opposition from farmers’ associations and other groups (see section “Use of third parties”).55 As of March 2024, the revision of PP 109/2012 had yet to advance.

For more details, please see the following websites:

Interference in Indonesia by Tobacco Industry and Allies

Tobacco industry tactics in Indonesia include the use of third parties; the targeting of youth with tobacco marketing, both at point of sale and online, as well as via event sponsorship; and sponsorship of popular sports such as badminton and football.

Use of third parties

The tobacco industry has long used third parties and front groups to advance its interests, as a means of achieving greater credibility and overcoming public mistrust.

The Indonesian Tobacco Farmers’ Association (Asosiasi Petani Tembakau Indonesia, APTI), a lobby group, opposes the WHO FCTC, and has urged the Indonesian government not to ratify the treaty.56 It has also frequently lobbied against increases in excise taxes on tobacco products. In 2019, APTI held a rally in front of the Ministry of Finance, to demand the repeal of an increase in excise and the retail price of cigarettes, and the revision of a regulation requiring at least 50% of the Tobacco Excise Revenue Sharing Fund to be allocated to health purposes.57

APTI has also opposed the proposed revision to Indonesia’s main tobacco control law, PP 109/2012. In 2022, in Temanggung, a major tobacco-growing region in Central Java, APTI representatives were seen at a public event displaying banners asking the local government for support in opposing the proposal.58 APTI also sent official letters to President Widodo opposing the revision, stating that it would negatively affect the livelihoods of people working in the tobacco sector, particularly farmers.55

Another lobby group which has opposed of any revision of PP 109/2012 is the Indonesian Tobacco Community Alliance (Aliansi Masyarakat Tembakau Indonesia, AMTI), a coalition of tobacco industry stakeholders – including cigarette manufacturers – established in 2010.59 It reportedly has close links to the PMI subsidiary Sampoerna.6061 AMTI has sought to portray tobacco control as an agenda imposed on Indonesia by foreign actors who do not understand the local context – a common tobacco industry tactic in the country.6263

Both APTI and AMTI are affiliates of the International Tobacco Growers Association (ITGA), a global front group funded and run by the ‘Big Four’ transnational tobacco companies (TTCs), as well as two major leaf merchants.646566 Though ITGA claims to defend the interests of tobacco farmers and their communities around the world, it uses tobacco farmers as a means of opposing tobacco control regulations and protecting the interests of the TTCs.66

Controversial marketing strategies: targeting youth

The tobacco industry has long seen young people as a vital target market; tobacco use generally starts in adolescence. In Indonesia, the mean age of smoking initiation amongst males is 18.3 years, while smoking prevalence amongst Indonesian adolescents (aged 10 to 18) increased from 7% in 2013 to 9% in 2018.6768

In Indonesia, there is a high concentration of tobacco retailers, high exposure to point-of-sale advertising and no restriction on the display of cigarette packs in retail outlets – all of which are associated with increased tobacco use amongst adolescents.536869 In addition, many retailers are located close to schools; enforcement of the ban on sales to minors is very weak; while sales of single sticks, which make smoking more accessible to young people, are still permitted.696870 Retailers therefore have an important role in recruiting new, young smokers, and maintaining growth of the market.68

Indonesia’s incomplete TAPS regulations have also allowed the tobacco industry to switch to less regulated forms of advertising such as event sponsorship and internet marketing, often targeting young people.71

For example, the popular music festival SoundrenAline, which has been running in Indonesia since 2002, was founded by Sampoerna.72 Following a visit to SoundrenAline 2016, researchers reported that Sampoerna branding and the slogan “Go Ahead” were found throughout the festival site. Sampoerna A brand cigarettes were widely sold, including by cigarette girls and boys – a form of direct one-on-one marketing.7173 Cigarettes that were not a Sampoerna brand were confiscated at the entrance.71 As of 2022, Sampoerna was still the sponsor of the event and owner of the registered trademark for “SoundrenAline”.72

With over 111 million users, Indonesia has one of the world’s largest Instagram audiences, over half of whom are aged between 13 and 24.74 According to the Tobacco Enforcement and Reporting Movement (TERM), as of 2023, around 70% of online tobacco marketing in Indonesia took place on Instagram.7576 Most of this marketing is indirect and community based. Rather than display their products directly, the tobacco companies build online communities of followers with a common interest such as music, travel or sport, as a means of improving brand visibility and indirectly promoting their products.7675

Controversial marketing strategies: sponsorship of popular sports

Tobacco industry sponsorship of sport is as old as professional athletic competition itself.77 It aims to create links between pre-existing associations people may have with sports (such as fun, excitement, strength, etc.) with tobacco branding and products; promote an image of tobacco use as normal and healthy; and appeal to young people.78

In Indonesia, TAPS has historically been very widespread in popular sports.79 Badminton, for instance, which the New York Times has described as part of Indonesia’s “national identity”, has long been a vehicle for tobacco industry sponsorship.80 From 2006, Djarum was the corporate sponsor of the national badminton trials for children and adolescents aged from 5 to 18.81 The trials were shown on national television, and participants were required to wear clothing which displayed the Djarum logo.6881

Ten civil society organisations reported Djarum to the National Commission on Child Protection, arguing that the sponsorship violated Indonesia’s child protection law.81 In 2019, Djarum agreed to remove its logos from the badminton trials.8283 It also withdrew its sponsorship from future trials, which critics argued would undermine development of young talent. However, in 2021 the state-owned telecommunications firm Telkom replaced Djarum as sponsor.81

Djarum owns the PB Djarum badminton club in Kudus, Central Java, which has a youth academy, as well as a club in Jakarta.807584 The company also continues to market itself and its products indirectly via Djarum-associated social media accounts which focus on badminton-related content.7675

An investigation into tobacco marketing on social media in Indonesia, India and Mexico around the 2022 FIFA World Cup found that 92% of the football-themed tobacco marketing originated from Indonesia, with 81% being produced by Djarum alone.79

Both Gudang Garam and Djarum, via their respective brands Intersoccer and Super Soccer, sponsored live World Cup viewing parties. Super Soccer, which describes itself as the “home of soccer fans in Indonesia”, promotes its activities on social media to hundreds of thousands of followers.79 It developed a “Soccerphoria” event series and campaign specifically for the World Cup, which were heavily promoted across its accounts. As well as the live viewing parties, these events involved mural painting, branded clothes, and limited-edition World Cup cigarette packs designed by local artists.79

In 2019, Djarum bought the Italian Serie B club Como 1907, via its subsidiaries SENT Entertainment Ltd and Mola TV. Mola, a television streaming service, has broadcast a reality TV series following 24 young footballers trying to succeed at Como 1907.

Relevant Links

Tobacco Tactics Resources

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