Key obstacles for stakeholders in Indonesia’s cigarette manufacturing industry are:

  • Indonesians’ improving awareness of healthier lifestyles;
  • The government frequently raises the tobacco excise tax for cigarettes (almost every year), causing cigarette manufacturers to raise selling prices to pass on costs to consumers;
  • It has become increasingly difficult to make advertisement for tobacco-related products (for example, cigarettes and packages as well as the act of smoking are not allowed to be shown in advertisement);
  • There is an increase in smoke-free places;
  • Packages need to contain graphic warning labels that discourage consumers from buying cigarettes.



Still, if we take a look at the table below, we can see that production of cigarettes in Indonesia actually managed to touch a record level in 2019 (when a total of 356.5 billion cigarette sticks were manufactured in Indonesia). Production numbers then dropped significantly when the COVID-19 crisis emerged in 2020. To what extent this industry will fully recover from the COVID-19 crisis remains to be seen.

So, despite the increasing challenging conditions for local cigarette manufacturers, production numbers managed to grow until the COVID-19 crisis hit.

[...]

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