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Competing with kreteks: transnational tobacco companies, globalisation, and Indonesia

Centre on Global Change and Health, London School of Hygiene & Tropical Medicine, London, UK

Correspondence to:
Ms Sue Lawrence
Centre on Global Change and Health, London School of Hygiene and Tropical Medicine, Keppel Street, London WC1E 7HT, UK; sue.lawrence{at}lshtm.ac.uk

Objective: To examine the strategies employed by transnational tobacco companies (TTCs) to compete more effectively compete with the dominant kretek manufacturers in Indonesia, and to consider implications of their failure.

Methods: Systematic analysis of corporate documents obtained from British American Tobacco’s (BAT’s) Guildford depository and from industry and tobacco control websites document collections.

Results: The limited progress of the TTCs in Indonesia is best explained by the distinctive political economy of its tobacco industry. Though effective when collaborating on regulatory issues of mutual interest, TTCs have been less able than kretek manufacturers to exercise political influence where their interests conflict. Global strategies of TTCs have undergone significant local adaptation in attempting to compete in this distinctive environment. While maintaining uniformity in core brand attributes, TTCs have sought to reconcile international imagery with local norms, particularly to appeal to women. BAT unsuccessfully attempted to develop clove based products that imitated the appeal of kreteks, withdrawn following concerns about exposing the company to charges of operating double standards.

Conclusions: The documents presented highlight the complexity of the global tobacco industry. Tobacco control efforts need to address more effectively the ongoing impact of kreteks while recognising the distinctive threats posed by TTCs.

Abbreviations: BAT, British American Tobacco; BATI, BAT Indonesia; BPPC, Clove Support and Trading Board; IBs, international brands; PM, Philip Morris; TTCs, transnational tobacco companies; USIBs, international brands originating in the USS

Keywords: British American Tobacco; globalisation; kreteks; Indonesia; Philip Morris

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