Arvindo: Application Of Plain Packaging Will Have A Direct Impact On The Electric Cigarette Industry In Indonesia

Illustration. (Photo: Doc. Antara)

JAKARTA - The Indonesian Vape Retail Association (Arvindo) stated that the application of plain packaging rules will have a direct impact on the electronic cigarette industry in Indonesia, especially for micro, small and medium enterprises (MSMEs), which are the majority of business actors.

According to Arvindo Chairman Fachmi Kurnia, the loss of trademarks will harm legal producers and business creativity, which can ultimately weaken local industrial positions in competition in the market.

"By eliminating unique visual characteristics, trademarks no longer have differentiation values, and creativity towards building a brand will disappear," said Fachmi in his statement, in Jakarta, quoted from Antara, Monday, November 11.

He emphasized that the rules for uniforming cigarette packaging without a brand identity could hinder consumers' switch to alternative tobacco products that have a lower risk.

Currently, he also said, consumers still have difficulty recognizing legal electronic cigarettes, plus this policy, the impact will further encourage the rise of illegal products at low prices.

"In the end, the policy will harm the government," he also said.

The policy of uniforming cigarette packaging without a brand identity is contained in the Draft Regulation of the Minister of Health (RPMK) on the Security of Tobacco Products and Electronic Cigarettes.

The regulation is a derivative product of Government Regulation (PP) Number 28 of 2024 concerning the Implementation of the Health Law (UU) Number 17 of 2023.

Therefore, he said again, the government needs to review the rules for uniforming cigarette packaging without a brand identity and involve business actors in its discussion.

"It is important that the resulting regulations are not only effective in protecting public health, but also considering the sustainability of industry and competitiveness of business actors," he said.

In line with that, brand and marketing practitioner Yuswohady stated, by uniforming into brandless packaging, it will harm business actors and consumers directly.

For business actors, he also said, the continuity of their business will be threatened with reducing store turnover because it encourages consumer behavior to buy cheap products, not based on considerations on product quality. Consumers will be confused about choosing quality products.

According to him, the worst impact of uniforming cigarette packaging without brand identity is the loss of trademarks, from a marketing perspective, the impact will be many cheap products.

"What is feared is that consumers are looking for any brands that tend to be cheap. So they don't compete about quality, instead they compete for cheap prices," he said again.

He also stated that the presence of electronic cigarette products at low prices will trigger the emergence of illegal products, because, what becomes competition in the market is low prices, not based on product quality.

"I think the electronic cigarette market will experience setbacks because legal products will compete with cheaper illegal products," he said.

Yuswohady hopes that the government will review the policy discourse, the consideration is that the electronic cigarette industry involves various broad value chains, one of which is excise which has been one of the sources of state revenue.

In addition, there are business actors and workers who really depend on the sustainability of the industry.

"The government needs to review the rules for plain packaging so as not to harm certain parties," he said again.