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Kretek Industry Faces Big Losses as US Moves to Ban Clove Cigarettes 

Jump to full article: Jakarta Globe (id), 2009-06-15

Intro:

Indonesia’s kretek cigarettes are almost certain to be banned in the United States after the US Senate passed a strict antismoking bill aimed at cutting the attraction of cigarettes to children.

The Family Smoking Prevention and Tobacco Control Act, voted through by a Senate committee late on Thursday, has a raft of new measures but includes the kretek prohibition because a US study found they helped to hook children on smoking.

If the bill is signed into law by President Barack Obama — as the White House says it will be — US authorities will have the power to impose strict new controls on the making and marketing of tobacco, including banning cloves as a cigarette flavoring along with such flavors as cherry and chocolate.

For Indonesian clove cigarette makers, who export about 20 percent of the $500 million worth of kretek sold overseas every year to the United States, this means $100 million a year is likely to go up in smoke. It is especially likely to affect Indonesia’s biggest kretek exporter, Gudang Garam, which has a factory in South America for the continental market.

Menthol cigarettes will not be included in the ban, however, which has angered Indonesian trade officials who point out that a ban on kretek but not menthol is discriminatory and are threatening to complain to the World Trade Organization. Government officials’ comments on the ban make it likely that WTO action will now proceed.

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