Indonesian tobacco firms post healthy profits

Tobacco firms are making big bucks in Indonesia and a mockery of the government’s statements about getting serious in the fight against smoking.

The tobacco firms are raking it in.

PT Gudang Garam, the second-largest producer, announced on Tuesday an 84 percent jump in 2009 net profit to Rp 3.45 trillion ($379.5 million) from Rp 1.88 trillion in 2008. The company is owned by the Wonowidjojo family, one of the country’s richest.

Rival PT HM Sampoerna, the largest producer, announced late last week that net profit increased by 31 percent to Rp 5.08 trillion last year, from Rp 3.89 trillion a year earlier. The company is controlled by US tobacco giant Philip Morris International.

The Jakarta Globe goes on to note that cigarette companies have massive clout. They employ “about 824,000 families” and the two biggest producers paid a total of about 380 million US dollars in income tax alone last year.

Even so, at about US$1.20 for a packet of Marlboros, you’d think there might be a little room to raise the excise tax and use the money to fund the country’s abysmal health services. No?


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