JAKARTA. Publicly listed cigarette-maker HM Sampoerna has denied rumors that the company will increase its cigarette prices as of Sept. 1, saying the information was incorrect and spread by irresponsible parties.

Sampoerna spokeswoman Elvira Lianita explained that cigarettes were heavily taxed and prices were increased only after comprehensive consideration involving many aspects.

"The aspects include the entire national tobacco industry chain, including farmers, workers, manufacturers, traders and consumers. The condition of the industry and people’s purchasing power must also be considered," she said in a press statement on Monday in Jakarta.

A hefty increase in the tobacco tax, she continued, would drive cigarette prices too high and harm people's purchasing power. It would also lead to widespread circulation of illegal tobacco products as their prices would be much lower, she claimed.

"With the current excise rate, the illegal cigarette trade reaches 11.7 percent, and according to a study conducted by national universities, leads to Rp 9 trillion [US$679.63 million] in potential state losses,” Elvira said.

Earlier, several media outlets reported that cigarette prices would increase to above Rp 50,000 per pack if tobacco tax was increased. (Ayomi Amindoni)

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