TOBACCO SALES

Evening Post, Volume CXV, Issue 33, 9 February 1933, Page 12

TOBACCO SALES

THREE MAIN. FACTORS

PASSING ON TAXATION

"From our point of view, there are three factors to'consider, increased exchange, increased duty, and sales tax," said Mr. _ B. Smith, managing director* of W.D. and H. O. Wills (N.Z.), Ltd. "A little time is needed to discuss these matters with the different sections of the trade* We have to find out first of all how they affect our own manufacturing costs, and our list prices, and then we have to find out how it is going to affect retail prices charged to the public. Our main object is to get the thing into operation, and get trade going again as quickly as possible. No one knows better than we that each of these upsets means a loss of business which is never recovered. If we had to fight the forces of Nature only, how much happier business and life would be. "Taxation must bo passed ou. We hope that the Government will not be disappointed in its expectations, of an increased yield in taxation, but we think that a reduction in cigarette taxation would have yielded it more revenue than any increase in tobacco taxation is likely to provide, ■ "We cannot Teally pass judgment on the sales tax and its effects until we see the Bill and see how it works in practice. If it has the effect of increasing manufacturing costs, which we think is not the intention of ,the Government, it will have a more serious effect on prices than was even intended. We hope'that when tho Bill is .in Parliament, and when it comes to be administered,- every effort will be made to protect the local manufacturer from having to pay sales tax on goods which are really the raw materials of his business. This we believe to be the intention of the Government and the resolutions, so far as we can interpret them at present, but this has got to be made absolutely clear in the Act, and not left to a process of interpretation." yA prominent retail tobacconist said it was obvious so far as the increase on cut tobacco was concerned, the Government was "aiming at . obtaining' extra revenue from-smokers making their own cigarettes with tobacco on which the lower rate of duty applied. Any increase in the prices. was bound to be passed on to the public, and it was anticipated that a revised price-list would be made available to the retailers very shortly. In some instances the increase would probably be as much as 2d on_ a 2oz tin. Since the last Customs increase on tobacco the practice

among smokers of making their own cigarettes had become more popular, and probably the Government felt that it was losing a good deal of revenue as a result.