Retailers Can Lose IDR 21 Trillion Per Year If They Are Prohibited From Selling Cigarettes

Chairman of Hippindo, Budihardjo Iduansjah (Photo: Mery Handayani/VOI)

JAKARTA - The Association of Indonesian Shopping Center Retailers and Tenants (Hippindo) noted that revenue from cigarette sales reached IDR 40 trillion per year. If cigarette sales are prohibited, then retailers are threatened with losing IDR 21 trillion.

As is known, the government limits retail cigarette sales to zoning from education centers and child game locations. The provisions for limiting cigarette sales are contained in Government Regulation Number 28 of 2024. This rule is expected to reduce the level of child smokers.

Chairman of Hippindo, Budiharjo Iduansjah explained that based on his calculations, cigarette sales were recorded at up to IDR 40 trillion per year, or 15 percent of the total sales of their products. With the ban on cigarette sales, retailer's income could be lost by around 53 percent.

"Supermarkets, minimarkets are 15 percent and it can reach IDR 40 trillion, yes, national cigarette sales in modern retail where modern retail is 15 percent and it can lose 53 percent of (smoking) sales," Budiharjo said in a media discussion, in Jakarta, Tuesday, August 13.

Budiharjo also highlighted the zoning or 200 meters apart which is regulated for a shop selling cigarettes from the point of activity of children. He said supermarkets in shopping centers are often placed not far from children's play centers. Likewise with minimarkets at residential points.

"Anyway, we can't sell it, if this zoning is carried out, it means that it will lose IDR 21 trillion in revenue, this is a huge number, so we can get it from data from minimarket members," he explained.

Not only lost revenue from the sale earlier, Budiharjo also highlighted the impact of its derivatives. According to him, the decline in cigarette sales can also affect the disruption of supply chains.

In addition, Budiharjo said this sector also contributes quite a large tax contribution to the state.

"This supply chain will also be disrupted, besides the previous tens of trillions in the retail sector, the derivative was the cigarette factory, the logistics warehouse, all of this SPG is big for taxes as well," he said.

Therefore, according to him, it is better for the policy of limiting cigarette sales to be postponed first. Budiharjo also asked the government to hold discussions with business actors.

"Don't do this just yet while waiting, we must all be called again to discuss this problem," he said.