Thursday, September 10, 2009
U.S. Hypocrisy and Kretek
Kretek are ousted from the US while American tobacco interests merrily peddle their wares overseas.
Indonesians should turn their attention away from Malaysian theft of their culture to American maltreatment of a rather different national icon – the kretek cigarette.
As of October 1 it will become a criminal offense in the supposedly free United States to sell kretek, the clove-enhanced cigarette dear to most Indonesian smokers and increasingly to foreigners. Indonesia should take this behavior to the World Trade Organisation. The country which in the name of free trade has for decades ensured that its tobacco companies are foisted on the world has the temerity to ban somebody else's exports to the US.
It should be acknowledged that kretek are no picnic, and that the US ban goes well beyond kretek to other tobacco products as well. According to studies, kretek are made up of 60 to 80 percent tobacco, 20 t0 40 percent ground cloves, clove oil and other additives, although the studies point out that they do not contain the thousands of toxic chemicals that conventional cigarettes are packed with.
This ban is not being done to protect domestic commercial interests. Kretek sales in the US are scarcely big enough to worry the big companies. They account for less than 1 percent of US cigarette sales. The ban on kretek is a product of an out-of-control US Food and Drug Administration which has been given authoritarian powers to declare tobacco products illegal, though illogically it cannot ban pure tobacco products, which take in US$1.5 billion in US exports annually according to the latest data.
In this case it is resorting to banning "flavored" cigarettes on the theory that flavoring adds to their appeal to the young. But this being the US, where big companies can buy their way around rules imposed by self-assuming health bureaucrats, menthol is exempted from the US flavoring ban. American tobacco purveyors sell plenty of menthol cigarettes, and they sell more of them to the young. According to US statistics, in 2006 almost 44 percent of smokers aged 12 to 17 years smoked menthol cigarettes, 36 percent aged 18 to 24 reported smoking menthol cigarettes and more than 30 percent of those over 35 reported smoking them.
Perhaps significantly, the small market for kretek in the US is dominated by Djarum, which is still Indonesian-owned and not a US concern. The multinational giants meanwhile have already moved on Indonesia, with Philip Morris acquiring Sampoerna, and British American Tobacco Indonesia, long a local manufacturer of white cigarettes, acquiring Bentoel. Ironically, back in 2004 Philip Morris had not opposed a proposed ban on kretek in the US for the cynical reason that it did not make any.
The hypocrisy of the US is stunning. According to a study by Frank J. Chaloupka and Adit Laixuthai for the National Bureau of Economic Research, the US in the 1980s and 1990s used Section 301 of the 1974 Trade Act to force open the cigarette markets of Japan, Taiwan, South Korea and Thailand. "Estimates from fixed-effects models indicate that the market share of US cigarettes in Japan, Taiwan, South Korea, and Thailand increased dramatically after the agreements as consumers switched from the brands produced by domestic monopolies to the brands of US cigarette producers," Chaloupka and Laixuthai wrote. "In addition, simulations based on the regression results indicate that per capita cigarette consumption in 1991 in the four affected countries was nearly 10 percent higher than it would have been had the markets remained closed to U.S. cigarettes."
Sure enough, Japan remains the biggest importer of US manufactured tobacco products, spending US$954 million on US cigarettes annually, followed by Saudi Arabia, Israel, Lebanon and, improbably, Iran at No. 5 despite the restraints on trade between the two countries.
The ban is also a blow, albeit a minor one, to the hand-rolled kretek industry which provides for thousands of poor Indonesians. It suggests a do-gooding zealotry on the part of the anti-smoking lobby worthy if not of the Taliban at least of Malaysia's beer-banning fanatics – and without even a religious text to rely on. In fact smoking disease patterns suggest that American-style flue-cured, Virginia tobacco with chemical additives which are the most dangerous cigarettes – certainly compared with the air-cured black tobacco ones such as France's traditional Gauloises and Gitanes.
The ban on kretek is discriminatory. One can be sure that if cloves were grown in the US there would be no such ban. As it is, Indonesians might think a reasonable riposte would be to ban all US-brand name colas until the kretek ban is lifted. After all, who knows what noxious substances are in Coca-Cola? The formula is a secret.
by Philip Bowring Asia Sentinel