Tightening Cigarettes In RPP Health Can Cause Layoffs To Decline In The Creative Industry Sector

Assistant Deputy for Commerce and Industry Coordination of the Coordinating Ministry for Economic Affairs Ekko Harjanto. (Photo: Screenshot/INDEF YouTube)

JAKARTA - The government is considered to need to avoid regulations that have a shock effect in the supply chain in the tobacco products industry (IHT) sector.

Assistant Deputy for Commercial and Industrial Coordination (Deputy V) of the Coordinating Ministry for Economic Affairs Ekko Harjanto said that until now several substances have not found an agreement, especially regarding the protection of addictive substances in the Draft Government Regulation (RPP) as the executor of Law Number 17 of 2023 concerning Health.

The substance includes the determination of tar levels and nicotine for tobacco products, additional materials, the number of products in packaging, sales of tobacco products, health warnings, advertisements, promotions, and sponsors.

"The government as the stabilizer of the country's economy needs to avoid a regulatory ecosystem model that provides shock effects for economic actors along the supply chain," said Ekko in the Indef Public Discussion agenda entitled 'The Death of the Indonesian Tobacco Industry in Jakarta, on Wednesday, December 20.

Ekko said the impact of the shock could be termination of employment (PHK) in the industrial sector, decreased farmers' welfare, decreased state revenues, and so on.

"Well, the impact of the shock has the potential to reduce the optimization of the upstream sector which has an impact on farmers' welfare, a decline in state revenues, a decline in the advertising industry sector, a decline in the distributor and retail sectors, a decline in the tobacco MSME sector, and other impacts," he said.

In addition, said Ekko, this also has an impact on the downstream sector because many retail businesses depend on the tobacco products industry. Another sector that also has an impact is the creative industry sector, especially advertising services.

As for Eko, based on the results of a study from one of the survey institutions in 2022, the tobacco products industry ranks 9th with the largest advertising costs in Indonesia during January-June 2022.

It is known, the total cost of the advertisement reached 292.81 million US dollars.

"Of course, we can imagine how big the economic impact will be, such as layoffs and others in this sector if the regulatory aspects of the Health RPP are in the form of prohibition norms and tightening restrictions on advertisements for tobacco products are actually applied," he said.