Is Indonesia, one of big tobacco's last frontiers, closing?

Not fast enough for anti-smoking campaigners. But Indonesia is slowly taking steps to end its status as one of the great growth markets for tobacco companies.

By Sarah Schonhardt,?Correspondent / March 3, 2013

On Sunday thousands of young Indonesians streamed into an expo center in Jakarta to sway to cool jazz and R&B beats. But looking around it might have been easy to forget that Java Jazz was about music, not smoking.

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Officially, this year?s event is called the Jakarta International Djarum Super Mild Java Jazz festival after its lead sponsor Djarum, Indonesia?s third-largest tobacco company.

Other sponsors include Indonesia?s national bank and telecommunications company, the ministries of trade and tourism, and global healthcare firm Cigna, whose support has drawn the attention of anti-tobacco groups and consumer protection watchdogs.

Tulus Abadi, who works on tobacco control issues at the Indonesian Consumers Foundation, called the co-sponsorship ?contradictive,? while a US-based anti-tobacco group, Campaign for Tobacco Free Kids, described it as ?not acceptable.?

When asked about its support, Cigna officials said they received sponsorship rights in return for providing free accident coverage to Java Jazz crew, artists and visitors.

?In keeping with our mission ? we used the opportunity to promote health and wellness at the event, including free health checks, exercise activities and healthy eating,? said Christine Setyabudhi, the president director of Cigna?s Indonesia subsidiary in an e-mail.

The tobacco industry remains very powerful in a country with one of the world?s highest smoking rates and one where consumer companies are scrambling to boost profits from a growing middle class eager to spend growing disposable incomes. Cigarette taxes contribute about $8 billion to the government budget a year and the industry is a major employer, with a quarter of a million Indonesians involved in growing tobacco and manufacturing cigarettes.

In the past decade, with Indonesia one of the few growth markets for tobacco, international heavyweights have poured into the market, buying out the founders of some of Indonesia's top cigarette brands. Indonesian smoking culture is dominated by the distinctive local kretek cigarette, which are heavily flavored with cloves.

In 2005 Philip Morris, maker of Marlboro, acquired one of Indonesia?s? top two cigarette companies, PT HM Sampoerna, for $5 billion. British American Tobacco, the maker of Lucky Strike, entered the market in 2009, when it bought a controlling stake in Bentoel for $500 million. Djarum has resisted overtures from foreign buyers and remains in Indonesian hands.

Source: http://rss.csmonitor.com/~r/feeds/csm/~3/D1-Q8iZmbSk/Is-Indonesia-one-of-big-tobacco-s-last-frontiers-closing

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