Sampoerna up cigarette prices

Sampoerna up cigarette prices

Bloomberg, Jakarta

PT HM Sampoerna, Indonesia's second-largest cigarette maker, said
it increased wholesale prices on all its brands, the second rise
in two months.

The price of its Dji Sam Soe hand-rolled clove cigarettes
went up 4.3 percent to Rp 5,490 (61 U.S. cents) for a pack of
12, the tobacco company said in an e-mailed statement. Sampoerna
also raised the price it charges distributors for nine other
products by an average rate 3.4 percent.

Indonesia's government increased fuel prices, telephone and
electricity tariffs in January as it reduced subsidies to cut a
budget deficit it expects will reach 34.4 trillion rupiah.

"With the price increase for other utilities, the cigarette
price increase will exert further pressure on already soft
consumer demand," said Heriyanto Irawan, head of research at
Merrill Lynch & Co. in Jakarta. "The sales volume will contract
this year for the entire cigarette industry."

The government raised the minimum price for cigarettes by
between Rp 40 and Rp 75 a cigarette and increased the
excise tax on hand-rolled cigarettes last November to help narrow
its budget deficit, estimated at Rp 40.5 trillion last year
and Rp 34.4 trillion this year.