NEWS Smokers gouged from hip pocket
BIG Tobacco is propping up its profits by sneakily raising cigarette prices way beyond increases in excise.
Cancer Council research reveals the pre-tax take on a pack of Winfield cigarettes has soared by nearly 150 per cent since 2010. For JPS smokes, the jump is more than 180 per cent. This compares to consumer price inflation (CPI) of just six per cent in that time.
Winnie Blues now cost $33.65 up from $12.95 at the start of the decade.
It is relatively common knowledge that the tax take has been surging — in the case of Winfields from $7.73 to $20.82 — so too has price excluding excise.
Retailers and maker British American Tobacco Australia’s (BATA) combined revenue per pack has grown from $5.22 to $12.83, the Cancer Council calculates, a rise of 146 per cent.
Had the pre-tax pack price only risen in line with CPI, Winnie Blues would be nearly $7 cheaper. The gouge is deliv- ering retailers and BATA an extra $2500 a year for each pack-a-day Winfields smoker.
JPS cost $30.85 versus $10.95 in 2010, during which time retailers and Imperial Tobacco Australia’s (ITA) cut has risen from $3.40 to $9.57, a rise of 182 per cent.
An increase in line with CPI would see JPS smokers paying $5.50 less than now. Instead a person smoking a pack a day is paying $2000 extra per year.
“It’s a dirty trick by these companies,” said Cancer Council Australia public policy director Paul Grogan.
BATA declined to comment on its profits but said “advocacy from groups such as the Cancer Council” had added $13 a pack to Winnie Blues since 2010 while noting its manufacturing and operation costs had increased.
ITA also said its costs had risen, excise has “significantly increased” and that it had “a responsibility to deliver shareholder returns according to expectations”. Philip Morris said it was covering costs and maintaining its responsibility to shareholders.