Increasing Taxes on the Cheapest Cigarettes

Finance
Taxes on the cheapest cigarettes and tobacco set to rise in France

TOBACCO: This change corresponds in a cigarette in an increase of between 10 and 20 cents per pack to those currently sold at 6.50 euros …

New higher taxes on cigarette packets and the cheapest rolling tobacco. The government has increased the “minimum tax” on these products via a decree published Friday in the Official Gazette . This change is in a cigarette in an increase of between 10 and 20 cents per pack to those currently sold at 6.50 euros (as brands News, Lucky Strike or Winston) or less.

Reduced margins of manufacturers or increased costs

Manufacturers may choose to absorb this increase by reducing their margins or pass on to consumers because in France it is they, and not the State, which set the retail price.

Tobacco companies had thus waived earlier this year to increase the price of cigarettes despite the entry into force in January of two new taxes, one on rolling tobacco and the other on the distribution. The Health Minister Marisol Touraine was then warned that manufacturers have “bent the rules”, other tax increases would come to push them to increase their selling prices.

The last price increase was in 2014

The decree published Friday shall have no immediate effect on prices paid by smokers. Tobacco companies should receive between Friday and Monday a letter launching a new certification price campaign. They will then have 15 days to transmit their new price list to the Customs and it will take about a month for them to be implemented.

Contacted by AFP, the Economy Ministry was not immediately available to comment on the decision. The latest rise in the price of tobacco in France dates back to 2014. It had increased the price of the cheapest package among the most sold at 6.50 euros brands and that of the most expensive at 7 euros.

An increase in smuggling traffic?

In a statement, the president tobacconists Ile-de-France, Oise and Seine-Maritime, Gasq Bernard said he was “offended by the government’s decision taken on the sly to 50 days of the presidential election, and whereas the work of Parliament is suspended. ” “This new price increase will also cause an increase in smuggling traffic,” he argued.

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