F

or Faisal Saidi, 21, a cigarette is his best friend. The final year student of the Sultan Amai State Islamic Institute in Gorontalo City, Gorontalo, has spent more than half of his life puffing cigarettes. It got him through his parents’ deaths and tough times at school.

The habit is also prevalent in his family. All of his brothers smoke. So when he, the youngest among the siblings, was told to quit, he resisted. He was whipped with a belt at home as punishment when he was caught smoking in sixth grade. “Sometimes I regret that I knew about cigarettes so young,” Faisal, who hails from Tilamuta, Boalemo regency, told The Jakarta Post.

Smoking is among the most pressing health problems in the country. The 2018 Basic Health Research recently showed that the prevalence of smoking among people aged between 10 and 18 years old in Indonesia, which has one of the world’s most liberal policies on tobacco, increased from 7.2 percent in 2013 to 9.1 percent in 2018.

Gorontalo, a northern Sulawesi province with a population of 1 million, has the second highest prevalence of smoking in the country, with 30 percent of people aged 10 or above saying that they smoke every day.

Apache, a kretek (clove cigarette) brand from Pasuruan, East Java, which is less well-known in Jakarta, is among the most popular brands in the province where cheap cigarettes are sought. Hand-rolled and known for its distinct taste, cheaper kretek brands are a smoker’s alternatives amid rising prices of cigarettes because of surging excises in the past three years.

While nationwide cigarette production has suffered across the years, the product of PT Karyadibya Mahardhika, a former subsidiary of Gudang Garam Group, remains strong.

Sukri Hasan, the company’s retail supervisor for Apache for Gorontalo, said the brand was thriving because it targets the lower-middle class in rural areas such as Boalemo, Pohuwato and North Gorontalo regencies.

He said sales of the brand, sold at Rp 17,000 (US$1.17) per pack, had continued to increase since 2015. He illustrated that weekly sales in 2015 were Rp 1.5 billion, while it increased to Rp 2.3 billion last year. This year, it reached Rp 4 billion per week on average.

“The excise will affect sales because it pushes the company to raise prices. But with our strategies, we’ve gained a large profit,” said Sukri, who said he sells 380,000 to 390,000 packs of cigarettes per week.

Asdar, a promotions coordinator for Djarum products in Gorontalo, said he considered himself lucky just to maintain his market, which is mostly in urban areas. The company’s products, especially its kretek brand Mustang, records sales of 100,000 to 200,000 packs per week. “We are still focusing on Gorontalo City as the province’s capital. With rising excises, we can only sustain our existing market,” he said.

The Finance Ministry recorded that tobacco production has been declining from 348.10 billion cigarettes in 2015 to 341.73 billion cigarettes in 2016, to 336.3 billion cigarettes in 2017, as the government has continued to increase the excise over the years. Small and medium businesses in the tobacco industry have also shrank from 2,540 in 2011 to 487 last year.

Kretek companies, which usually operate on a small to medium scale and employ low-skilled workers to produce cheap hand-rolled cigarettes, have been most affected.

Karyadibya Mahardhika, which was acquired by Japan Tobacco last year, however, has shown that foreign investment helped it to survive.

Institute for Development of Economics and Finance economist Bhima Yudhistira said the cigarette industry in Indonesia was experiencing its sunset as it had suffered from shrinking consumption and production over the years, while the plan to open the industry to foreign investment would worsen conditions.

“Opening up the industry to foreign companies in these conditions will mean fiercer competition. There will not be joint ventures, if a foreign investor could fully manage their own company then the competition will bleed small and medium enterprises,” he added.

Bhima also said the government’s plan contradicted with its goal to control tobacco, such as by increasing the cigarette excise to lower cigarette consumption.

“So why do they boost investment in cigarettes? This is not in line with the government’s grand mission on health to lower cigarettes consumption. The policies contradict one another,” he added.