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But I believe if the draft talks about banning the sale of cigarettes to kids, it will have no problem. On the talk of further restricting tobacco... The global campaigns on the danger of smoking have encouraged many countries to impose stricter regulations on public smoking. Indonesia, although a bit late, has also begun to follow suit. A House of Representatives group has proposed a bill on tobacco control, which among other things would ban cigarette advertisements, seek higher taxes on cigarette sales and prohibit the sale of cigarettes to minors.

The bill, however, has yet to enter the deliberation process because many other bills are still on the waiting list. Nevertheless, the tobacco bill has stirred up controversy among industry stakeholders as thousands of tobacco companies and workers’ associations were left out of its formulation. Andrew White, corporate affairs director for PT H.M. Sampoerna, the world’s largest clove cigarette manufacturer, talked to The Jakarta Post’s Andi Haswidi recently about the issue. Below are excerpts from the interview. What do you think about the proposed law on tobacco control? We heard about a bill being discussed at one point at the House, but we haven’t been formally invited to look at the draft.

But I believe if the draft talks about banning the sale of cigarettes to kids, it will have no problem. On the talk of further restricting tobacco advertising, we also agree. One thing we asked for is, if such a bill would go forward, clearly it has to factor in the uniqueness of Indonesia; for example, the employment issue. There are more than 10 million people working in the industry. And for that reason, it makes sense for the industry to be a part of any discussion. Second, such a bill would also have to apply equally to all companies. In other words, there are about 4,000 manufacturers here, so the tobacco control, with all the rules, must apply to all companies.

Today there are regulations issued by provincial administrations such as in Jakarta and Surabaya on public smoking. We think it makes more sense if there is a national law, where all municipalities would abide by one set of laws and standards. Q: In the United States, your parent company, Philip Morris (PM), supports a bill that, among other things, aims to ban the sale of flavored cigarettes. PM’s subsidiary Sampoerna recently introduced a new clove-blended cigarette brand, Marlboro Mix 9. It seems to conflict with PM’s stance. Can you explain? A: I’m not really aware about the information, but what I do know is that our parent company, Altria (subsidiaries include Philip Morris), is supporting more regulations in the U.S., the FDA bill.

But the specifics of that obviously are determined by the U.S. Congress. Here in Indonesia, we also support regulations. In Indonesia today, there is no law per se. One of the things we all agree on is that kids should not smoke. Therefore, regulation that would prohibit the sale of cigarettes is something we do support. We joined the Indonesian Cigarette Producers Association shortly after the acquisition (of Sampoerna), and have been working with the association since then on a comprehensive tobacco control bill, which among other things would ban the sale of cigarettes to minors. How damaging would the ban on advertising be to the industry? The idea of banning advertising on TV or radio or banners is not something we oppose. Ultimately, if you look around the world, tobacco advertising is being regulated. It is something that will come to Indonesia sooner or later, and it’s much better to take a constructive approach in engaging with our critics. But I think the point here is that there is sometimes a sense that if tobacco advertisement is banned, it will be a bad thing. Many countries have done that, and people still smoke. Phillip Morris, our parent company, is doing quite well.

But look, if this is going to truly be a compromise, you have to come to a middle place, and it wouldn’t be very genuine to say we want a tobacco control bill but we want to continue to advertise, to continue this and that. There has to be give and take. The point is, we are willing to come to a middle point, to find a place where we can constructively move things forward. How fast that moves forward, when it happens, are obviously the government’s call. Our view is to take a constructive approach, engage with our critics, talk to them and find a compromise. Many analysts say the tobacco industry is heading for gradual downturn. Your comment? Globally, you can see the industry is slightly declining year to year. And I see that trend continuing. If we look at it as a tobacco company, Sampoerna in Indonesia, our market share is approximately 28 percent.

So for us, we are competing with other companies for market share. So even if the market is beginning to decline, there is still ample opportunity to grow, in terms of gaining more market share. This is a very mature industry, and the smoking rate in Indonesia is relatively stable. Fighting for market share is really the battleground for competition. Are you satisfied with the sales performance of the new brand, Marlboro Mix 9? We are competing aggressively in the market for adult smokers. That is no question about that. This year alone, in total there were 1,300 new brands launched in Indonesia, and collectively they gained about 4 to 4.5 percent market share. We launched two brands in the past year, Dji Sam Soe filter and the Marlboro Mix 9 (clove-blended). About 15 percent of the growth of all new brands come from just these two brands. We don’t launch a lot of brands, but when we do, we support it with advertising, promotion, distribution and availability. Three months after being launched, Marlboro kretek already gained 0.4 percent share, one of the most successful launches we’ve ever had.