The German government is planning a E1 tax increase on a packet of 20 cigarettes. The rise is likely to be phased in between January 2004 and July 2005.
France’s health ministry intends to put up the price of cigarettes by 30% a year for the next three years. That will double the current price of a pack of 20, bringing it in line with prices in the UK.
Wholesale Confectionery and Tobacco Alliance chief executive John Bowden predicted that the increases would set a trend across Europe, with Holland and Belgium following suit.
He said: “This is the first ray of light for us as wholesalers in years. The closer the continent
gets to our prices, the less rewarding it is to smuggle in tobacco.”
Association of Convenience Stores public affairs and communications manager James Lowman said the proposed increases in continental duty rates were good news for UK retailers.
He said: “The problem has always been the disparity between duty rates in the rest of the EU and the UK. Tax rises on the continent are the first move towards equalisation of duty. The Treasury must freeze UK duty to stay in line.”
Retailer Audrey Wales, of the Tobacco Alliance, said: “We welcome any standardisation of EU prices for cigarettes. However, this will affect booze cruisers more than organised gangs who smuggle cigarettes in from outside the EU.”