Smokers bulk buy cigarettes to beat ‘sin tax’ imposed today

Tax on tobacco and sugary drinks should be supplemented with incentive campaigns

With hours to go before a new federal tax took effect, doubling the price of cigarettes and caffeinated drinks, customers were stockpiling their favourite brands, prompting some neighbourhood baqalas, grocery shops to enforce sales limits on top-selling products.

Throughout the capital, display shelves typically stocked full with packets of Marlboros, Davidoffs and other imported cigarette brands popular in the UAE were bare or near empty yesterday as customers demanded bulk purchases in advance of the price hike, which comes into effect today.

“Before, this was full,” a saleswoman at an Allday Minimart in the capital said, pointing to the depleted shelves behind the sales counter.

“They were buying five to 10 boxes. For example, Marlboro, it costs Dh102 per box, and they buy three to four, like that. Marlboro, Davidoff, Parliament, Dunhill – all.”

Similar scenes played out across half a dozen baqalas and grocery shops visited by

The National across the city. “There is no more stock, ma’am, the stock is finished,” said Shihab Mohammed, a sales clerk at the National Trading and Developing Establishment Smokers Centre.

For the past two weeks, customers have been buying multiple 10-pack boxes of bestselling brands, he said.

“They were buying, last week, like five boxes each.”

But over the weekend, Mr Mohammed said he was ordered by his boss not to sell more than one packet of cigarettes per customer.

Other shop workers said that they, too, had to restrict the number of cigarette packs sold to individuals.

Yesterday, a 10-pack carton of Marlboros, for example, cost Dh95 at the Smokers Centre and many baqalas, while one pack was being sold for Dh10. But starting today, the price will double as excise duty, dubbed the federal “sin tax”, is applied to tobacco products and energy drinks, while sugary soft drinks will be subject to a 50 per cent increase in taxes.

When the law on excise taxes was published in August, the country’s leaders said it was intended to diversify the Government’s revenue streams while discouraging the consumption of products that harmed the environment and public health.

The UAE is the second country in the Arabian Gulf to introduce excise taxes after Saudi Arabia, which began taxing soft drinks, energy drinks and tobacco at the same rate earlier this year.

Kareem HD, a 30-year-old Tunisian, said he was unable to find a single pack of Marlboro Gold or Red yesterday.

“Actually, I think they are hiding it,” said Mr H D, echoing the theory shared by other customers. “Honestly, because it’s not only one shop. It’s all of them, if you are asking for Marlboro.”

After settling for a packet of Camel Blue, Mr H D said he did not think that doubling the price of cigarettes would persuade him to quit smoking for good, but that the move was “really bad” for his wallet.

Dubai resident Ihab Ahmed said he had tried to buy cigarettes to stash in his home in Silicon Oasis. However, he said the cigarette shelves were “barely filled with anything”, and the petrol stations were also running low on stock. “I thought I’d stash too, so asked if they have full packs. There are, like, no packs, all sold.”

Social media users reported calling their local supermarkets, only to be told they were all out of cigarettes.

Customers were not out in force displaying the same desperation to hoard large quantities of energy or soft drinks as they were for cigarettes, a manager at a Lulu Express said.

“With cigarettes, we are running out, but nobody is going to stockpile too much Red Bull,” he said.

But at least one consumer was seen piling his cart full of fizzy drinks.

Ahmed, 36, said every month he visited the grocery shop to stock up on his favourite drink, Red Bull, and soft drinks for his family, so the bulk purchase was not necessarily driven by the impending tax.

“When I buy, it’s in bulk because I don’t have time to buy every day or like this,” said Ahmed. “I think it [the excise duty] is good for the country, of course, but for the people it is not good.”

He did say that the price rise may persuade him to cut down. “Maybe, it will make me stop,” Ahmed said.

In August, the President, Sheikh Khalifa, signed into law proposals to introduce excise taxes for tobacco and fizzy beverages. This week, the law comes into effect. From October 1, smokers will have to be pay twice the amount for a packet of cigarettes, and consumers of sugary drinks will have to shell out 50 per cent more. The law’s purpose is deterrence. According to the World Health Organisation, some 8 per cent of the UAE’s population suffers from diabetes, while more than 70 per cent of its people are overweight and 34.5 per cent are obese. According to statistics published by the Tobacco Atlas, more than 18 per cent of male adults and 2.5 per cent of female adults in the UAE are smokers. Among youth, the rates are shocking: more than 15 per cent of boys and nearly 6 per cent girls consume tobacco.

The consequences of these twin addictions are grim. By some estimates, tobacco addiction claims 26 male lives and one female life every week in the UAE. Unhealthy dietary habits are causing obesity to spiral out of control. By 2047, the UAE is estimated to spend $47.5 billion on health care to tackle obesity. What people think of as private addictions end up creating enormous burdens on public health services.

This newspaper has a long record of calling for a tax on sugary drinks and tobacco and it is hardly surprising that doctors have welcomed the new taxes. Studies elsewhere have shown that higher prices can moderate consumer behaviour, especially of young consumers.

Our expectations of the new law, however, must be tempered with realism: the pinch of higher prices will probably yield to the power of addiction. Smokers will not give up cigarettes altogether, nor will children stop consuming sugar-laden drinks because prices have gone up. Nonetheless, the new tax is an important step in improving public health. It should be augmented with educational campaigns that spread awareness among people of the effects of smoking. Parents should be dissuaded from buying sugary drinks for children.

Eventually, deterrence must be accompanied by incentives. This can take the form of cheaper health insurance premiums for non-smokers and people who maintain a healthy and balanced lifestyle. A more radical approach would be monetary incentives. An experiment in the United States invited smokers to deposit $150 (Dh550) with their employers. Those who subsequently quit smoking received $650, in addition to their original deposit. The results, published in 2015 in The New England Journal of Medicine, showed that financial incentive was the most effective way to stop smoking. Such an approach, of course, will require employers to play an active role. The eventual returns, whether in terms of reduced insurance costs or improved employee performance, make the initial investment worth it. The battle against addiction is an arduous one, but a conscious movement in the right direction has begun.