"Hungary's tobacco market has reached a turning point. By the end of the year it must comply with European Union regulations regarding excise tax. This necessitates a hike of the excise tax on tobacco twice this year. The transition period to comply with the EU cigarette tax regime expires at the end of the year in Poland and Slovakia as well.The excise tax on tobacco is to be raised twice this year, first in April and then in September. The hike will naturally be reflected in the retail price of cigarette, as well, business daily Világgazdaság said on Tuesday.
Hungary was granted derogation from adopting minimum excise duty levels on manufactured tobacco by the European Union until 31 December 2008.
The two hikes are likely to push up the price of products in every consumer price segment by ten forints, said János Miklós Jakab, legal director at British American Tobacco (BAT) Hungary.
As the pricing policy of companies is not determined solely by the excise tax system, a different strategy is possible for every company and product, he noted. Last year, however, could serve as some guidance, since there were two price hikes then too, taking the price of tobacco products up by HUF 20 on average, Jakab added.
The table below show cigarette prices in the European Union as of January 2007, provided by the Tobacco Manufacturers' Association (TMA), the trade association for tobacco companies operating in the United Kingdom. (TMA's principal members are British American Tobacco UK Ltd, Gallaher Ltd and Imperial Tobacco Ltd. JT International S.A. is an associate member.)
The TMA is likely to issue an update on cigarette prices at the end of this month."
Source: Portfolio Online Financial Journal
23.01.2008