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igarette prices should be raised by at least 113 percent if the Indonesian government really wants to discourage people from smoking, a Center of Health Economics and Policy Studies (CHEPS) study has found.

CHEPS noted the government’s move to increase the price of cigarettes by 10.5 percent to an average of Rp 13,900 (US$1.04) per packet starting Jan. 1 had failed to push people to quit smoking because they still could afford to buy them.

Despite the price increase, tobacco consumption in Indonesia has increased to an average cost of Rp 37,600 per person per month in 2017 from the baseline figure of Rp 35,800 recorded in 2015, the study’s finding shows.

CHEPS chairman Budi Hidayat said Indonesia’s consumption rate would continue to increase should cigarettes prices be increased by 60 percent to an average of Rp 20,200 per pack, in which cigarette consumption was stimulated to stand at Rp 41,140 per person per month.

“Smoking is addictive. Smokers tend to buy cigarettes even when the price is increased,” Budi said in Jakarta on Friday.

Diella Yasmine, a 25-year-old worker of a private company in South Jakarta, said it was difficult for her to quit smoking because she had smoked since she was in the second year of senior high school.

“Even if the price is increased, I will strive to buy them. I feel depressed when I don’t smoke, especially when I have a lot of work to do,” Diella said.

She further said she would stop buying cigarettes only if their price reached Rp 100,000 per packet.

Meanwhile, Walid Riyas Mauladzad, a 24-year-old university student in Depok, West Java, said he would not stop smoking even if cigarettes were Rp 35,700 per pack.

“At such a high price, I might only reduce the number of cigarettes I smoke every day. If I can smoke one pack a day now, I might make it last two or three days,” Walid said.

All this time, the widespread fear that cigarette price increases would lead to higher inflationary pressure has been used as an excuse not to increase cigarette prices. To date, tobacco price increases have been lower than the average increase in people’s income.

CHEPS data shows the price of cigarettes were 10.7 percent of the country’s per capita income in 2010 while in 2015, it stood at 9.5 percent. While the market share of clove cigarettes declined by 10 percent from 2010 to 2015, the number of cigarette workers increased by 30,000 in the same period. Large cigarette companies have managed to absorb workers laid off by small tobacco companies.

The margin of cigarette sales for companies increased to 62 percent in 2016 from 53 percent in 2010. The mechanization of cigarette production at large companies continues to expand, reducing the market share of clove cigarettes to 20 percent in 2015 from 30 percent in 2010.

Among 10 Southeast Asian countries, Indonesia is the only one that has yet to totally ban tobacco companies from advertising their products in print media, television, radio and cinemas, according to the Southeast Asia Tobacco Control Alliance (SEATCA).

With poorly implemented tobacco control policies, Indonesia has become an investment target of foreign tobacco companies.

Japan Tobacco Inc., the world’s fourth-largest cigarette manufacturer, plans to acquire all the shares of PT Karyadibya Mahardika and its distributor PT Surya Mustuka Nusantara for $677 million. The two are subsidiaries of Gudang Garam, one of largest cigarette manufacturers in the country.

The CHEPS survey found that Indonesia’s cigarette consumption rate would stop increasing if tobacco prices were increased by at least 113 percent to Rp 26,900 per pack.

At such a high price, Budi said, smoking would slightly decrease to Rp 35,700 per person per month from the baseline of Rp 35,800 in 2015.

To get significant results, CHEPS says cigarette prices should be increased 150 percent to Rp 31,590 per pack, which may decrease the consumption rate to Rp 26,444 per person per month.

Budi believed the government’s move to apply higher cigarette prices would be effective in preventing people from starting to smoke as well.

“If the price increases significantly, they will think twice before buying them,” he said.

Budi brushed aside the general assumption that increasing cigarette prices through excise would have a bad impact, i.e. a rise in illegal cigarette production.

“The existence of illegal cigarettes has no relation with price increases. It’s more about law enforcement in the field. Illegal cigarettes will always exist even if there is no price increase,” he argued. (yon)