View Single Post
Old March 18th, 2009, 01:59 PM
Hajo Flettner
Status: Offline
Hookah Legend
Join Date: May 2007
Posts: 4,746
Default Re: Tobacco prices going up

Originally Posted by chrisicool View Post
This really sucks, but I don't think it'll jeopardize sales too much. People will just be switching to cheaper brands like Nakhla, AW, etc.. SB was a rip-off to begin with haha.
I suppose that a switch to cheaper brands will be common but I also suspect that overall consumption will drop a lot. Naturally, prices will rise a good deal more then just the compounded effect of the tax increase (which I predict will come out to about $2-3 per 250g) but i'll bet that retail prices will go up in response to declining sales in an attempt to boost per unit profits since that's what happened in the past. My guess is that we will see prices rise about $4-5 per 250g.

The thing is that the decline in consumption will result in a sizable net decline in tax revenue so what ever programs are supported to be supported by excise taxes will get hammered.

The bright side is, I suppose, that smuggling and criminal involvement will take off just like it did Canada a few years back so I suppose some of will be able to dodge the tax man.
Reply With Quote