Economist Tips Smuggling Boom if Cigarette Prices Raised 365%

Jakarta. A plan touted by some in the government to increase cigarette prices is likely to have a disastrous affect on tobacco farmers and encourage counterfeit and smuggling in the local market, a researcher has said.Rumors of a price hike were sparked after research from the University of Indonesia's center for health economics and policy studies found rising prices lowers cigarette consumption.The research found that 71 percent of smokers would quit entirely if the price reached Rp 50,000 ($3.75) per pack.

Dzulfian Syafrian, an economist at the Institute for Development of Economics and Finance (Indef), said any price hike would substantially affect the industry, pointing firstly to laborers and farmers who would likely lose their jobs.