‘Illegal profiteering’ follows tobacco tax hike: smoker
Smokers who bought cigarettes or tobacco this year have had to pay the increased price from January 1 and are victims of “illegal profiteering”, a disgruntled smoker says.
The Commerce Commission confirms the price rise must apply to new stocks and any retailer selling old stock at the new price might be in breach of the Fair Trading Act.
In another push to get Kiwis to give up smoking, the Government has raised the excise duty on tobacco.
The cost of a standard 20-pack of cigarettes rose by 10 percent on January 1, to shoot through the $15 price tag.
On New Year’s Day, most dairies and service stations in Gisborne sold a packet of cigarettes at the new price.
Legally, the new price is effective on new stock purchased on or after January 1. Existing stock was to be sold at the pre-increase price.
A Gisborne smoker found retailers acknowledged they should not charge the extra, but would not adhere to it.
“After visiting five retailers, I rang around the majority of other retail outlets and none of them would honour the old price,” he said.
While he totally supports the added tax to push people to stop smoking, he is against “blatant profiteering”.
“There is no way any retailer could have new stocks delivered on January 1 in Gisborne. I rang the local tobacco distributor and they were closed and had not sold or made any deliveries.”
Retail outlets The Gisborne Herald spoke to said they understood the price rise started from January 1 and they were unable to carry much excess stock.
“We are dictated to by the cigarette companies about what we charge and how much stock we can carry. Gisborne retailers were able to carry more because of the Rhythm and Vines festival, though.” said one retailer.
Only one cigarette and tobacco retailer The Herald talked to did not lift prices.
“We will not put the price up until we start using new stock,” he said.
Sara Stavropoulos, a spokeswoman for Customs New Zealand – the government body responsible for tax on tobacco and tobacco products – said any of those products removed from a licensed manufacturing area or imported (which is where excise is collected) after midnight on December 31 would be subject to the new rates.
Commerce Commission communications manager Allanah Kalafatelis said if a shop owner represented that the price rise was due to the government increase in the excise, and the shop was not at that time entitled to charge the increase as they were selling old stock, it could be construed as misleading – prompting an issue under the Fair Trading Act, which it did enforce.
“Any consumer who feels they have been misled in this regard can lay a complaint with the commission, using either the online complaint form or by phoning 0800 94 3600,” she said.
The rise is the result of the annual adjustment to the excise duty, the third since June last year.
Quitline spokesman Bruce Bassett said the past two 10 percent tax increases on tobacco products saw about a 93 percent increase in demand for Quitline services.
“I think there are price thresholds and when the prices get to a certain point, it shocks people into realising how much of their discretionary income is being put into feeding their addiction.”
The Government brought legislation to Parliament to raise the excise duty on tobacco in 2010.
It saw an immediate 10 percent price increase for cigarettes followed by another 10 percent every January until 2012.
- New Zealand smokers to pay $20 for a pack of cigarettes
- Inflation Affected by Tobacco Tax Increase
- Cigarettes Become More Expensive by 26%
- Cigarette prices up but smokers on the rise
- Cigarette duty in the Cayman Islands doubled