Cigarette sales down in 2010 after price hike

Cigarette sales down in 2010 after price hike

03-09-2010

The year 2010 will apparently be worse for cigarette producers and sellers in the Czech Republic than last year because the January VAT hike followed by the February increase of excise duty on cigarettes has cut their consumption, according to Philip Morris’s half-yearly report.

 

The tobacco market increased by 8.5 percent in Jan to March this year, but Q2 saw a drop of almost 6 percent, CTK has learnt from the report of the biggest producer of tobacco products in the Czech Republic. Cigarette consumption is expected to be lower also during the remaining months of the year, according to the report.

Tobacco producers say that raising taxes on cigarettes aimed at regulating the consumption of these harmful products and bringing in money to the state fails to have the required effect and boosts the black cigarette market instead.

Smoking opponents, however, say that the price of cigarettes is low in the Czech Republic compared to the rest of Europe, which is the reason for their still high consumption.

Philip Morris’s estimate of cigarette sales in the Czech Republic last year is 21.7 billion units, up 35 percent on the year. Adjusted for the effect of stocking up on cigarettes, the entire market would fall by 6 percent last year.

According to data from the Czech Statistical Office, average daily consumption of cigarettes increased by around a fifth to nearly six cigarettes per person between 1989 and 2008. Statisticians started recording cigarette consumption back in 1955 and since that time it has grown by almost 60 percent.

According to a survey published recently by the EC, around 26 percent of people smoke in the Czech Republic and in Slovakia, the two countries being slightly below the EU average of 29 percent.

Czech cigarette consumption per person and year (units of cigarettes):

year 1955,1989,2000,2001,2002,2003,2004,2005,2006,2007,2008 consumption 1337,1776,1882, 1664, 1893, 2192, 2243, 2275, 2338, 2345, 2107