Cigarettes price rise set to leave smokers fuming

“On average the price will go up by 20 cents per pack,” said Ralf Leinweber, of the firm British American Tobacco, which makes Pall Mall.

Competitor firms Reemtsma, which makes the JPS brand and Philip Morris, which makes Marlboro, confirmed similar rises.

The price of a pack of 19 cigarettes will rise by about five percent. A pack of Lucky Strike, for instance, will rise from about €4.60 to €4.80. The top-selling Marlboro brand, which is already more expensive at about €4.90, will rise slightly to about €5.

Self-rolled cigarettes are also in the sights of the tax man. A 40-gram pack of loose tobacco will attract 12 to 14 cents in extra tax each year – as more people roll their own to escape the soaring cost of manufactured cigarettes.

One reason for the rise is higher federal government tobacco taxes, which kick in from May 1, lifting the cost of a pack by between four and eight percent. Similar rises will happen every year through 2015.

However the industry is also imposing a general price rise, which it blames on the rising cost of its materials.

“All of our costs are rising, especially raw tobacco, which is becoming more expensive,” BAT’s Leinweber said.

Smokers are a sturdy source of income for the treasury, delivering €13.5 billion alone in tobacco taxes last year. On top of that, they pay sales tax and the tobacco industry pays profit tax.

Various political decisions have been financed by hikes to tobacco taxes. Between 2002 and 2005, the tobacco tax was lifted five times to pay for anti-terrorism measures and elements of health reform measures.