Advertising under threat

| January 25, 2017
television Indonesia photo

Photo by basibanget

Indonesia’s House of Representatives (DPR) is planning to bring in a ban on the advertising of tobacco products on television and radio, according to an Indonesia Investments story.

Currently, radio and television advertisements for tobacco products are the subject of restrictions, including those governing when such advertisements may be aired.

Indonesia Investments said that Indonesia’s tobacco industry, which it described as ‘massive’, objected to the plan for a full ban on radio and television advertising.

It said that such a ban would have a big effect on government revenue since cigarette excise duties were a key source of government revenue, and on the revenue generated by media organizations since tobacco companies comprised the fifth-largest advertiser in Indonesia.

Based on data from the research firm AdsTensity, Indonesia’s tobacco industry spent IDR6.3 trillion (US$474 million) on television advertising last year, with the biggest industry spenders being Djarum (IDR 1.91 trillion), Gudang Garam (IDR1.32 trillion), and HM Sampoerna (IDR1.25 trillion).

Elvira Lianita, head of fiscal affairs and communication at HM Sampoerna, said the government needed to re-think whether a full ban would be appropriate because there already existed a law that limited tobacco-related advertisements in the Indonesian media.

Lianita said the ban would have far-reaching effects because not only would the earnings of the tobacco industry decline, but so would those of the government and the media. And it would affect the welfare of many small Indonesian tobacco farmers as well as workers in the country’s cigarette plants.

Budi Darmawan, corporate communications manager at Djarum, said the ban would have a big impact on the tobacco industry of Indonesia because among all forms of advertisement, television advertisements were the most effective.

The industry’s views, as expressed by the story, seem to undermine the claim that advertising affects brand shares rather than overall volumes.

Meanwhile, the Indonesian Consumers Foundation (YLKI) has urged the government to ban tobacco-related advertisements on television. Tulus Abadi, chairman of the YLKI, said Indonesia was the only country worldwide that still allowed cigarette producers to advertise on television.

The Indonesia Investments story said the DPR’s proposal showed that the Indonesian government was in favor of tobacco control and the protection of public.

Category: Breaking News, Regulation

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