THE TOBACCO INDUSTRY

Hokitika Guardian, 24 July 1930, Page 5

THE TOBACCO INDUSTRY

GROWTH IN DOMINION. PROVISION OF DUTIES NEEDED. • , .. i WELLINGTON, July 22. The great development of tile tobacco and cigarette industry in New Zealand has meant a serious loss in Customs revenue, which the Government proposes to make good by increased Excise duties. The Prime Minister to-night quoted details of tobacco and cigarette production within the Dominion, showing that it had risen from 405,3061 b in 1925 to 1,550,9591 b last year. “The quantity ot tobacco and cigarettes manufactured in the Dominion has thus,” he said, “increased by over 275 per cent. The loss of revenue on these articles during 1929 was over £150,000;' which represented about 10 per cent of the total duty collected, on tobacco . during that year. Further, the duty on" raw tobacco is supposed to operate so that the local farmer may receive a.y protection of 2s a lb. According to information :in my possesion, it appears that some years ago he actually receive! • e'd less for his product; that the amount of protection.; Although I understand.£ that the nveraga .price how obtained by £ f the grower, is layout 2s ; 2d a lb, there i« ; f evidence to show that ui certain impor-U tant lines-..at; least, the percentage of New Zealand;; leaf used has decreased from about 70>pHer cehV to-about 50, NEW ZEALAND TOBACCO NOT FAVOURED. “The only inference which can be drawn from the facts is that the con- ■ y cession which has been obtained by the manufacturer has not had the effect of inducing him to increase the quantity of New Zealand leaf used which in turn has adversely affected the tobacco farmer. When it is realised that the average price at the port;' of export from the United States; of the leaf tobacco .imported ’ into New Zea- *' land is about 2s 2d lb, it will be recognised that something s must be done U; to place the matter on a more satis- ; factory footing. In an endeavour to ; remedy this'state of affairs it is pro->• posed to reduce the duty on imported A raw leaf tobacco by Is . a lb and to in- ?.i-' crease: the Excise duties by this '■ amount. “The effect of these alterations will ?'■: be best seen by considering the duty on locally manufactured cut tobacco under the old rate and the new. If a manufacturer who now uses half local and half imported leaf were so to increase the quantity of New Zealand leaf that he used only the local product, he would pay practically the . same duty ns he does'now. If, on the t; other hand, such a manufacturer de- " sii'ed to continue the. use of the same percentage of imported leaf, the total duty payable would be increased from 2s 8d to 3s 2d a lb.' It is believed this will result in the use of a quantity of New Zealand leaf. It is considered that , the concession at present granted on locally manufactured cigarettes and cigarette tobaccd is tpd great, and it is proposed that about . one-half of the , concession thereon should be withdrawn.”