High prices and low stocks hit UAE’s ardent smokers

On Saturday the tills of baqalas and tobacco kiosks rang constantly as smokers bought packs by the hundreds. Yesterday they were silent. The doubling of prices under the new excise tax that came into affect on October 1 looked to have the intended affect, despite the predictable rush to stock up the day before.

In Abu Dhabi yesterday, many shoppers appeared to be put off by the new prices, with shops reporting a fraction of their usual trade in tobacco. Energy drinks were also hit with the 100 per cent levy and fizzy drinks by a 50 per cent hike.

Those on good salaries will probably see the hike as negligible, but for many the Dh3.50 to Dh7 increase in the price of a low-end packet of cigarettes and the jump from Dh11 to Dh22 for some premium brands, is likely to be too much.

Select baqalas and hypermarkets have applied the prices but those with old stock have kept prices low.

Whatever the price, shoppers will find slim pickings. Shelves at half a dozen baqalas and supermarkets visited by The National yesterday were nearly empty. Retailers said a lack of supply by distributors caused the shortage.

Customers caught out by the

new tax walked away empty handed.

At the Smokers Centre in Carrefour at Marina Mall, clerk Rhodora Breganza had seen five surprised customers walk away by early afternoon after seeing the new prices. “It’s been effective so far,” she said.

One customer, a Nepalese construction worker, pulled a Dh5 note from his pocket as an afterthought after buying his lunch. Ms Breganza shook her head. “New prices,” she said. “It’s seven dirhams.” Short Dh2, he walked away. Abdul Razak, at the Mohammed Tahir Baqala off Hamdan Street, had been given a sixpage list of amended prices to be implemented immediately. On Saturday, the day before the tax was implemented, he had sold 60 packs. By mid-afternoon yesterday, he had sold just three. “People here smoke a lot,” he said. “In the 15 years I’ve worked here how many cigarettes have I sold? A lot. But from today you’ll see a change. People won’t want them any more.”

At the neighbouring Ridwana Baqala, new price tags had been stuck to the shelves but prices were unchanged. It made little difference. Shelves were almost empty because their supplier had not come for a week.

“They’ve only given us limited stock for the past month,” said shopkeeper Mohammed Kadbu. Larger retailers reported similar issues.

“We have not raised prices yet because what we have is the old stock,” said Sayyid Minhas, the purchasing manager at Everfresh Hypermarket.

“Once we have a circular we will increase the price but not beforehand. Then again, we don’t have much stock because the main cigarette supplier has not given us anything.” He said he expected sales to fall.

Shisha prices are expected to increase significantly at lowend cafes in Khalidiya. Upmarket cafes may absorb the extra cost.

“You have to care about the customer,” said Ahmed Taha, the owner of Cafe De La Paix, at Marina Mall. “In shisha, you’re making money. If you make 50 per cent profit then take 25 or 10 per cent. Don’t be greedy.”