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3 Key Markets for Philip Morris International

The tobacco company does business around the world, but some of its markets are more important than others.

http://www.fool.com/investing/2016/09/26/3-key-markets-for-philip-morris-international.aspx

Cigarette maker Philip Morris International (NYSE:PM) has built a truly global business, serving customers on six continents. Yet some of the nations in which Philip Morris sells its cigarettes and other tobacco products are more important to the company’s overall success than others, and investors need to watch those markets particularly closely to make sure that they catch any potential changes that could help or hurt the company. Below, we’ll look at three key markets for Philip Morris to see how they’ve fared recently.

1. Indonesia

Indonesia has one of the largest overall cigarette markets of any country that Philip Morris serves, and unlike many areas of the world, that market is growing. In the second quarter of 2016, Philip Morris estimated the size of the total cigarette market at 83.6 billion units, up 5 billion in just the past year. For its part, Philip Morris shipped more than 28.5 billion units to Indonesia during the quarter, claiming about a third of the overall market with brands like Sampoerna and Dji Sam Soe. In particular, Philip Morris has had success with what it calls the Whites segment, claiming four-fifths of the market in that category. The key Machine-Made Kretek market, which makes up about three-fourths of Indonesia’s total market, has been less successful for Philip Morris, but the company still claims about 30% of that segment.

Indonesia has suffered from a sluggish economic environment lately, and Philip Morris has seen its market share fall by a full percentage point over the past year. Gains in the size of the market were largely due to the timing of the Ramadan period compared to last year’s second quarter, and Philip Morris expects long-term trends to be closer to flat. Nevertheless, Indonesia’s sheer size will make it an important market for Philip Morris to target going forward.

2. Russia

Russia also has a strong culture of smoking, and its size makes it an essential element of Philip Morris International’s overall strategic vision. The Russian cigarette market sold about 72.1 billion units in the second quarter, and Philip Morris was responsible for 20.5 billion of them, climbing market share of 27%.

Oddly enough, though, Russia is one area in which the Marlboro brand has been almost inconsequential. Marlboro has a market share of just 1.4%, compared to 8% for Bond Street and 3.9% for Parliament. Other brands, which include L&M, Chesterfield, Optima, and Next/Dubliss, were collectively responsible for more than half of Philip Morris sales in Russia.

Troubling for Philip Morris is that the Russian cigarette market is shrinking quickly, posting a nearly 7% year-over-year drop compared to last year’s second quarter. The price increases that Philip Morris has implemented to try to offset falling volume have resulted in a hit to market share, and the company will have to balance competitive pressure against its desire for higher profit in order to get the most from the nation.

3. Italy

By contrast, Philip Morris’ markets in the European Union are relatively small. Yet the EU is an essential component of Philip Morris’ success because of the company’s ability to squeeze higher profit margin from many countries there.
As an example, in the second quarter, Philip Morris’ sales in the EU and in Asia were roughly the same, but EU operating company income of $1.07 billion was more than $320 million higher than the corresponding figure in Asia.

Within the EU, Italy stands out. The Italian cigarette market sold only about 18.7 billion units in the second quarter, but Philip Morris was responsible for more than half of them, at 10.1 billion. Marlboro had market share of nearly a fourth all by itself, and the Chesterfield and Philip Morris brands were responsible for another 20 percentage points of share.

The good news for Philip Morris in Italy is that efforts to reduce the level of illegal trade in cigarettes has paid off somewhat. With the new PMI Impact campaign, Philip Morris hopes to engage a broader set of interested parties to fight smuggling, and the likely result is potential further gains in legitimate sales volumes of its tobacco products. Investors should watch results in Italy closely for additional signs of success on the illicit trade front.

Philip Morris wants to serve the whole world, and it will continue to reach out to customers everywhere it can find them. These three countries will be especially important for Philip Morris in its efforts to capture as much growth as possible going forward.

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Sex, Lies, and Cigarettes

In this Emmy-nominated documentary, Christof Putzel investigates Big Tobacco’s successful and deadly expansion into the developing world. From the smoking baby to the Marlboro Man, little is off limits in the “Wild West” of the world’s fastest growing smokers market.

-Overseas Press Club Award
-Prism Award

Sex, Lies, and Cigarettes from Christof Putzel on Vimeo.

Increasing tobacco tax: Another smart move by Jokowi?

http://www.aseantoday.com/2016/09/increasing-tobacco-tax-another-smart-move-by-jokowi/

Cheap cigarette prices in Indonesia are driving a health crisis of increasing numbers of smokers and spiralling associated death rates. But with huge numbers of people employed in the tobacco industry, raising prices to reduce this risk is a dangerous move by Jokowi’s government.

By Fawnia

Since rumours about rises in cigarette prices made it to the news a week ago, there has been endless debate, discussions, and surveys. The differences of opinion, which revolve around the effectiveness of the policy and the reasons behind it, show substantial divisions in public opinion.

The price hike is heavily influenced by a recent study from the Centre for Health Economics and Policy Studies at the University of Indonesia. It says that according to a survey of 1,000 people across 22 Indonesian provinces, 82% of the respondents said they approved the idea of a rise. Meanwhile, 72% of smokers agreed they would quit smoking if the price of cigarettes went above Rp 50,000 ($3.80)

At the same time, the results showed that 67% of adult males in Indonesia, or around 70 million people, were smokers and that this number has been increasing sharply since 1995. Compare this to public health figures that explain 217,400 deaths every year are caused by non-communicable diseases and the problem becomes apparent. Of these deaths; smoking cigarettes is the highest risk factor. If you accept that the increase in the number of smokers goes hand in hand with increases in cigarette production, it is also worrying to know that Indonesia will produce 125.3 billion more pre-rolled cigarettes over the next ten years.

Twice the price, twice the risk? Current cigarette prices in Indonesia range from just Rp 12,000 ($0.9) to Rp 20,000 ($1.5), and this low price makes it easy for teenagers as young as 12 years old to smoke. A survey completed by the World

Health Organization in 2014 supported this suggestion, showing around a third of boys between the ages of 13-15 in Indonesia were regularly smoking. That figure will almost certainly have risen.

Despite this pressing evidence the proposal to raise cigarette prices to Rp 50,000 has triggered a range of responses. One member of the House of Representatives believes that although the rise would discourage smoking, the government should be concerned about the fate of people working for tobacco companies. On a similar note, East Java Governor Soekarwo has said the increase would be a significant challenge to employment in the province.

Soekarwo explained his region depends heavily on tobacco industry employment for 6.1 million people, while taxes from smoking products make up the majority of East Java’s locally generated recurring revenue. Indeed, as the tobacco industry is one of the largest sectors in Indonesia, the decision to double the price cannot be made hastily.

At the same time, steps would also need to be taken to rule out an increase in the circulation of illegal products as a result of a price hike. Rumours of the new pricing are already a big concern for Indonesian tobacco farmers, and according to industry insiders, wholesalers are taking advantage by bidding for their stocks at a low price.

This situation has spurred peaceful demonstrations in Central Java by members of the Association of Indonesian Tobacco Farmers (APTI). They are worried for their livelihood and demand the government reduces tobacco imports and cancels the change in pricing. According to another industry group, the jobs of more than 1.5 million workers are at stake.

The significant increase has yet to be finalised, and Finance Minister Sri Mulyani Indrawati says there is no decision yet regarding the new ruling on prices or taxes. Will the government succumb to the public’s angry protest, or will it be a ground-breaking measure that reduces the number of smokers in Indonesia? In the balance of the health of the economy versus the health of the people; there is an enormous amount at stake.

Health costs of smoking may be higher than tobacco profit

http://www.thejakartapost.com/news/2016/09/06/health-costs-of-smoking-may-be-higher-than-tobacco-profit.html

Quitting smoking is hard as cigarettes contain nicotine, an addictive substance in tobacco that fuels cravings. After smoking, the brain becomes dependent on the nicotine and has thus rewired itself.

Because of this physical dependency, if a person stops smoking for a period of time, they will start experiencing symptoms of withdrawal. This is the brain and body adjusting to no longer having nicotine in the system.

But quitting smoking in a country like Indonesia, where 67 percent of men smoke, poses a different kind of challenge altogether.

After smokers overcome their withdrawal symptoms, such as anger and anxiety, they still have to face the last stage of overcoming nicotine addiction, which is reinforcement.

“The reinforcement challenges in Indonesia are very strong. People who have quit smoking will start smoking again once they see their neighbors smoking and smell the smoke. They might also see cigarette ads and start smoking again,” Widyastuti Soerojo of the Public Health Scholars Association (IAKMI) told The Jakarta Post.

This has led to an extremely low quit ratio for smokers in Indonesia. According to data from the World Health Organization (WHO), the quitting ratio for men in Indonesia is only 9 percent, while it is 23.2 percent in women.

Lioni Hendrawaty, a 30-year-old NGO worker, is an example of someone who finds that the temptation to smoke again after quitting is too much to resist.

She has been a smoker for 14 years. Throughout that time, she had tried repeatedly to quit smoking.

She said that she noticed her breathes getting shorter and so she was afraid that her habit would eventually kill her.

Lioni was diagnosed in 2014 with hypothyroid, a common disorder in which the thyroid gland does not produce enough thyroid hormone. “Since I was diagnosed, every time I smoke, my heart beats faster. It’s uncomfortable,” she told the Post.

Consequently, she was told by her doctor to stop smoking as her smoking habit would only exacerbate her illness.

But it turns out that being ill is not enough for someone like Lioni to stop smoking.

“Actually I had succeeded in reducing my cigarette consumption to once a day. At the most, I smoke three cigarettes in one day,” she said.

Therefore, it is important to make smoking not normal and not cool as the stakes are too high for Indonesia.

Though the government often argues that the tobacco industry brings much-needed revenue to the country, with it targeting to collect Rp 148.86 trillion from tobacco excise this year, the economic loss from tobacco consumption is actually much greater.

In 2013, the total loss due to tobacco consumption hit Rp 378.75 trillion, according to the Health Ministry, resulting from lost productivity due to illness, disability and premature death in youth and medical expenses.

Indonesia’s economy is also expected to lose Rp 59,580 trillion (US$4.5 trillion) by 2030 from tobacco-related diseases.

The University of Indonesia’s demographic institute associate director, Abdillah Ahsan, said Indonesians are having the hardest time to quit smoking because smoking is already considered normal in the country.

Smokers who want to quit will be constantly seduced by everyone who smokes around them as well as by pervasive cigarette advertisements.

“Access to cigarettes is very easy. If I live in a housing complex, I will find a small stall selling cigarettes just a few houses from me. It’s also easy for children to buy cigarettes. If they step out of their schools, they will find a warung. Above the warung will be a banner advertising cigarettes,” Abdillah said.

Furthermore, public officials are often shown to be smoking in public spaces, such as lawmakers around the parliament building.

Cigarettes & Tobacco in Indonesia: A New Roadmap Needed

http://www.indonesia-investments.com/news/news-columns/cigarettes-tobacco-in-indonesia-a-new-roadmap-needed/item7130

The Indonesian government is advised to make a new roadmap for the cigarette (and tobacco-related products) industry that includes targets for the short, middle and long-term. Moreover, the roadmap should involve strategies that aim to find a middle way between reducing cigarette consumption (protecting citizens’ health) in Indonesia while at the same time optimizing lucrative state revenue from this industry (as well as safeguarding the jobs of the nearly six million of Indonesians who are working in the cigarette supply chain).

The government of Indonesia is still discussing whether to raise the excise tax for cigarettes. This hike would help the government to reduce its looming tax and budget shortfall in 2016, while discouraging people from consuming the notorious “death sticks”. Last week it was reported that the government might even raise the price of a package of cigarettes from around IDR 20,000 to IDR 50,000 per pack. However, this is most likely a false rumor as such a drastic hike would in fact jeopardize state revenue, jobs in the tobacco-related sectors and would also give rise to a blossoming illegal cigarette market. In 2015 cigarette prices had already risen by an average of 11 percent.

Balancing between the safeguarding of high state income (from the tobacco excise) and protecting people’s health is key for the government. This year the government targets to gain IDR 140 trillion (approx. USD $10.6 billion) from the cigarette excise. As such, cigarettes account for about 95 percent of total excise income for the Indonesian government in 2016. This illustrates the importance of the cigarette industry in terms of state revenue. In 2017 the government targets to raise IDR 150 trillion worth of cigarette excise.

On the other hand, having a big population that is addicted to cigarettes also gives rise to economic costs for the government, particularly now it is serious to expand its universal healthcare program. Smoking-related physical illnesses (such as heart diseases) cause costs that need to be carried by the government and society. Meanwhile, having many ill people also implies that Indonesia does not make optimal use of its human resource potential.

To protect the millions and millions of passive smokers in Indonesia, authorities should undertake more efforts to encourage smoke-free areas in buildings and public facilities (both indoor and outdoor). On the other hand, the domestic tobacco industry should be able to boost production of cigarettes for export purposes. Falling domestic cigarette consumption but boosting cigarette exports (trying to become the cigarette production hub of the Asia Pacific) would be a win-win solution for Southeast Asia’s largest economy.

The tobacco industry is one of the largest industries in Indonesia, reflected by the fact that two cigarette manufacturing companies are positioned within the top ten of largest Indonesian companies (in terms of market capitalization) listed on the Indonesia Stock Exchange. The main reason is that there exists a huge market in Indonesia, while the government has not been eager to implement measures that aim at curtailing tobacco consumption in society. For example, Indonesia is one of the few Asian countries that is yet to ratify the World Health Organization (WHO)’s Framework Convention on Tobacco Control (FCTC).

All the above-mentioned matters need to be considered when creating a new roadmap for Indonesia’s tobacco industry.

Facts about Smoking in Indonesia

There are about 91 million (active) smokers in Indonesia (roughly 36 percent of the population)

About 70 percent of Indonesian smokers are part of the poorer segments of Indonesian society.

These poor families spend about 12 percent of their disposable income on cigarettes (making these death stick the second-most popular item for low-income families, after rice). A price hike would discourage the men in these families to purchase cigarettes

Every day an average of 1,172 people die because of smoking-related illnesses

Some IDR 7 trillion or approximately 30 percent of funds that are available to Indonesia’s National Health Insurance (Jaminan Kesehatan Nasional, or JKN) program are spent to combat tobacco-related diseases

In Indonesia the cigarette excise is still relatively low at a maximum of 57 percent; abroad this maximum is 80 percent. Therefore, Indonesian cigarettes remain among the cheapest worldwide and thus tempting for consumers

House Approves Gov’t Plan to Raise Tobacco Excise

http://en.tempo.co/read/news/2016/08/23/056798216/House-Approves-Govt-Plan-to-Raise-Tobacco-Excise

TEMPO.CO, Jakarta – Chief of Commission IX of the House of Representatives Dede Yusuf said that his Commission will support the government’s plan to increase tobacco excise tariff. However, Dede underlined that revenues from tobacco excise must be channeled to provide medical services.

“If the government increases tobacco excise tariffs, we will agree, but revenues from the excise must be used for medical funds, building hospitals,” Dede said on Tuesday, August 23, 2016.

In addition, Dede also stated that the government must provide protection for tobacco farmers. “Not the cigarette industry,” Dede said. Dede said that even today, many laborers in the cigarette industry are being paid low wages.

Dede asserted that tobacco excise has large contribution in generating state revenue, with a total contribution of Rp 120 o 140 million. Based on available records, the number of active smokers in Indonesia had reached 90 million people, 10 percent of which are children. “This is very concerning,” Dede said.

Dede said that Commission IX is focusing on discussing tobacco control effort, which is considered to be an addictive substance. Moreover, Dede stated that the government needs to protect Indonesian tobacco farmer and Indonesian tobaccos. “In the cigarette industry, they only use 40 percent local tobacco,” Dede said.

Ombudsman Raises Concern Over Plan to Increase Tobacco Excise

http://en.tempo.co/read/news/2016/08/22/056797790/Ombudsman-Raises-Concern-Over-Plan-to-Increase-Tobacco-Excise

TEMPO.CO, Jakarta – The Indonesia Ombudsman delivered several notions related to the planned tobacco excise increase. The increase is predicted to boost cigarette prices to Rp 50,000. Some of the notions include the Ombudsman’s concern that higher excise rate would not be effective to suppress cigarette consumption.

Although the total amount of tobacco excise in 2015 had reached Rp 139.5 trillion, the Ombudsman was not certain that it goes in line with cigarette consumption rate. “If demands are elastic, it is predicted that excise will reduce revenue, but at the same time suppress cigarette consumption rate,” according to Ombudsman Commissioner Alamsyah Saragih in a press release on Sunday, August 21, 2016.

However, if tobacco excise is to be increased and state revenue increases, Alamsyah said that it means cigarette consumption is not declining. “And household financial pressure will increase,” Alamsyah said.

The Ombudsman also questioned the production sharing fund for tobacco producer region, which is considered to be ineffective. According to Alamsyah, the Tobacco Farmers Association argued that there are regions who still use the fund to purchase operational vehicles.

In addition to the lack of direct benefits, the Ombudsman argued that the percentage of production sharing for tobacco producer region, which is currently set at two percent, is too small. Alamsyah added that the government had only planned to issue a supervision guideline for tobacco production sharing fund in 2016. “As a result to bad management, local tobacco prices are sold cheaper compared to imported tobacco,” Alamsyah said.

The Ombudsman also highlighted the government’s strategy in spending revenues gained from tobacco excise. Alamsyah said that if the government is planning to shift from producing tobacco to other commodities, trillions of funds originated from tobacco excise should be used for research and development activities to discover new high productivity commodity.

The arguments against making cigarettes Rp 50k are ridiculous, but the gov’t will probably listen to them anyways

http://jakarta.coconuts.co/2016/08/22/arguments-against-making-cigarettes-rp-50k-are-ridiculous-govt-will-probably-listen-them

If you follow the Indonesian media whatsoever, you’ll know that they are totally freaking out right now about the possibility that the government could raise the taxes on cigarettes to make them cost Rp 50,000 per pack (even as netizens are making memes claiming they will are not panicking about it).

The notion that the price of cigarettes in Indonesia will more than double didn’t start with the government actually saying they would do so, or that it was even a possibility. Rather, it began with a survey of 1,000 Indonesian smokers, conducted by Universitas Indonesia’s Public Health Faculty. Among the more incredible results of the survey were that 72% said they’d quit smoking if a pack of cigarettes costs Rp 50,000 or more and that 76% agree that a tobacco tax hike and overall increase in the price of cigarettes would be a good thing.

However, there are still no actual signs the government is doing anything other than considering it as an idea that has been “communicated,” as Customs and Excise Director General Heru Prambudi put it. A few government officials have also expressed some tentative support for a tax hike, but there is certainly no concrete evidence that the government is studying it as a real possibility.

That has not stopped some pro-tobacco industry advocates from denouncing the unlikely Rp 50k cigarette scenario, with the Chairman of the Indonesian Cigarette Manufacturers Association (GAPPRI) Ismanu Soemiran even going so far as to call the rumor a deliberate hoax “made to cause commotion and economic chaos”.

While Ismanu thinks the idea would cause chaos, advocates of the tax hike say it would bring plenty of huge benefits to the country. Besides the most obvious one of getting a large percentage of smokers to quit the incredibly addictive and health hazardous habit (which is estimated to kill 217,400 Indonesians per year), the Indonesian Consumers Foundation (YLKI) notes that the steep price increase would put cigarettes out of the reach of Indonesia’s poorest, not to mention young children.

However, opponents to the idea have already issued several dire warning about the disastrous effects such a cigarette tax hike would have on Indonesia, most of them having to do with the economy. These are their arguments (and why they’re ridiculous):

It will cause a decrease in tax money overall

Opponents of the tax hike argue Indonesia is highly dependent on the huge amount of taxes they collect from cigarettes currently – in 2015, the government collected about Rp 144.6 trillion in excise taxes, of which tobacco taxation made up about 96 percent. They say that even with the increase in the tax, the resulting drop in demand will lead to a huge overall drop in tax revenue, at a time when the government desperately needs money to cover budgetary shortfalls.

If they were talking about almost any other product they might be right, but because of its addictive properties, the demand for tobacco would likely not drop proportionately with the increase in price. And because it would be such a large increase in the tax rate specifically, even if demand was decreased by about ⅔ as suggested by the survey results, tax revenue would remain about the same.

Also, consider for a moment how much money the government currently spends on healthcare for tobacco related illnesses. One study estimated that amount to be around Rp 2.9 trillion per year just for smokers, without calculating the costs of healthcare for people affected by secondhand smoke. There’s also the enormous loss in national productivity caused by smoking related diseases. It may be a longer term investment, but reducing smoking rates always ends up saving countries more money eventually.

Lastly, if you agree with the logic that the government should allow people easy access to an extremely dangerous and addictive substance because it helps them make money, congratulations, you’ve just justified the legalization and taxation of all sorts of drugs.

It will hurt poor tobacco farmersThis is the argument used not just against the the Rp 50k price but also any tobacco control measure proposed in Indonesia. It’s easily the tobacco industry’s most effective argument since it frames the issue as one of employment – a recent Tempo article mentions that 30-35 million people are employed by the tobacco industry in Indonesia (although that number comes from the National Commission to Save Kretek (KNPK) so it might not be totally accurate).

As YLKI head Tulus Abadi argued, increasing tobacco regulations have not led to corresponding layoffs in other countries. Also, if Indonesia is ever going to get serious about fighting cigarette addiction, it is going to have to start transitioning tobacco farmers into cultivating other types of crops.

In truth it may not be easy for some of those poor tobacco farmers. But let’s not forget, that many of the richest people in Indonesia are tobacco tycoons. Perhaps they can use parts of their enormous fortunes to help the farmers they rely on to find new trades.

It will increase the number of illegal cigarettes

This is probably true, but that’s a matter that government law enforcement should have to deal with, just as they deal with the spread of illegally produced alcohol. And unlike illegal alcohol, which is often toxic and lethal, illegal cigarettes probably wouldn’t contain the harmful additives that are used by large manufacturers to make their products more addictive.

At any rate, the chance of seeing such a steep excise tax increase is probably next to nil (we hope to be pleasantly surprised). However, the government is currently studying how much the next increase in cigarette taxes will be, and we hope that all of the talk currently taking place in the media makes them consider at least pushing it at least a bit farther than they would have previously.

72% of Indonesians would quit smoking if a pack of cigarettes costs Rp 50K: Survey

http://jakarta.coconuts.co/2016/08/18/72-indonesians-would-quit-smoking-if-pack-cigarettes-costs-rp-50k-survey

Indonesia’s alarmingly high smoking rates can be attributed to many factors, chief among them the government’s hesitance to reduce and regulate cigarrette consumption, which has led to their ubiquitous availability and incredibly cheap prices.

One notably shocking statistic is that 67.4% of Indonesian males over 15 smoke, but a new survey shows that that number could be significantly curtailed if the government slapped a heavy tax on tobacco production, which would in turn raise cigarette prices.

Universitas Indonesia’s Public Health Faculty recently conducted a survey of 1,000 Indonesian smokers to gauge the relationship between smoking prevalence and cigarette prices. Unsurprisingly, the majority of respondents said they’d give up smoking if cigarettes were more expensive.

“As many as 72% said they’d quit smoking if a pack of cigarettes costs Rp 50,000 or more,” said lead researcher Hasbullah Thabrany, as quoted by Kompas.

Currently, a pack of cigarettes generally cost around Rp 20,000 in Indonesia.

Surprisingly, 76% of the respondents – all of whom are smokers, mind you – said they’ agree to a tobacco tax hike and overall increase in the price of cigarettes.

The government is well aware of the results of the survey.

“Making a pack of cigarettes cost Rp 50,000 is something that’s being communicated,” said Customs and Excise Director General Heru Prambudi, as quoted by Liputan6 yesterday.

However, Heru added that the government would have to look into the issue not just from a public health perspective, but from an economic perspective as well.

“We have to communicate this to all stakeholders, be it the pro-health or pro-industry, because [tobacco] farmers have a say in this too. If we only listen to one party, we can go bankrupt,” he said.

“If the price of cigarettes go beyond the optimum curve, there will be negative effects such as the death [of the tobacco industry] or the rise of illegal cigarettes.”

The survey estimated that the state would stand to earn around Rp 70 trillion annually from tax on tobacco if a pack of cigarettes were to cost Rp 50,000. Last year, the state earned Rp 139.5 trillion from tobacco taxes.

Do you think that the importance of public health should outweigh the potential economic shortfalls should cigarette prices be raised? Let us know your opinion on our Facebook page.

‘Suara Hati Anak’ Anti-Smoking Campagin Aims to Increase Public Awareness of Tobacco- Caused Diseases

Jakarta. Indonesia’s health ministry and Vital Strategies, an international organization focusing on research activities on priority public health issues, launched a campaign called “Suara Hati Anak” (Voices of Children), to increase public awareness of the impacts of smoking.

In a statement to the Jakarta Globe recently, Vital Strategies said the campaign involves placing advertisement in national media from May 27 until June 10 this year, uploading campaign videos on YouTube, promoting the hashtag #SuaraTanpaRokok on social media and updating the website www.suaratanparokok.co.id.

This is the fourth collaboration between Indonesia’s health ministry and the organization.

“Tobacco consumption creates public health problems that will require priority assistance. Cigarettes contribute as one of the main causes of deaths in Indonesia. We can prevent this by encouraging the younger generation to give up smoking,” Health Minister Nila Moeloek said in a statement from Vital Strategies.

Vital Strategies is an affiliate of The Union, an international nonprofit scientific organization based in the United States that helps low-and-middle income nations fight tuberculosis, HIV, asthma and other lung diseases through technical assistance, education and research.

According to Vital Strategies President and Chief Executive Officer José Luis Castro, “the poorest families in Indonesia spend nearly 12 percent of their income on cigarettes. As shown in the campaign, their welfare and the kids’ future prospects will be affected if the breadwinner falls sick from smoking.”

Castro cited a report from the World Economic Forum which showed smoking is one of the main factors of non-contagious diseases that could drain $4.5 trillion from the Indonesian economy from 2012 until 2030.

Meanwhile, the World Health Organization’s (WHO) Tobacco Atlas showed more than 217,400 people die every year in Indonesia from smoking-related diseases.