ABSTRACT
This research analyses the correlation between excise rates and cigarette companies in Indonesia recorded in the Directorate General of Customs and Excise. In order to find out how the market shapes the cigarette industry, the analysis was done using structure—conduct—performance frame work, that looked at the relationship of structure, behaviour, and performance in the cigarette industry. The cigarette industry in Indonesia has an oligopoly structure with a moderate level of competition. Of the two models in all companies, it has been found that the application of tax rates is significantly and negatively associated with the cigarette companies’ market share and the sale price of cigarettes. The population growth of individuals aged 15–24 years has a positive and sinifcant impact on the cigarette market share. Meanwhile, for the five major companies, the other model (those a fed 15 years and above) has found that excise per selling price has a positive effect on the market share.
