An increase of a VAT – inclusive 50 cent was most likely at the lower end of the possible increases that the Minister may have announced, given that the previous two years had seen €1.75c (€1.00 and 75c) being applied.
We noted with interest the comments made by the Sinn Fein TD, Matt Carthy who had been delegated to speak in opposition to the Motion to increase the Excise levy and was very critical of what he described as a “vindictive” increase (HERE). He was also fully appraised of the reality of the level of smuggled tobacco that is creating a second parallel market. Mr Carthy stated that these recent increases were counterproductive and also noted that the implementation of an excise on vaping liquid was punitive to those seeking to quit smoking.
While the increase of 50 cent per pack of 20 was announced, you as retailers are NOT permitted to add anything to that price. Such a move is acceptable in every other commodity where you endure an increase in your wholesale costs. It is only for cigarettes that you are curtailed and legally prevented from applying an increase to help you maintain your retail margins.
That is why it was interesting to note that the pricepoint of €19.00 has been advised by JTI and BAT to Revenue, which is actually a VAT- Inclusive increase of 55 cent (similar 55c increases have been applied by Imperial and Philip Morris on some of their 20packs).
We must sincerely hope that ALL tobacco companies will introduce MPI’s early in the New Year to provide a restoration of the trade margins and in so doing, improve the profits earned from selling their brands at their prices in our stores.
