Little Profit Left For Tobacconists

Sun (Auckland), Volume IV, Issue 1050, 14 August 1930, Page 10

Little Profit Left For Tobacconists

INCREASE IN DUTY SURVEY OVER RECENT YEARS When a smoker buys a plug of tobacco costing Is does he realise that 6d of that sum goes to the Government in duty? The remaining sixpence goes to cover shipping charges, and any profit •which might be left for growers, manufacturers and tobaconists. The duty on tobacco, cigarettes and cigars has increased enormously during the past few years, and the last increase will mean the end of importing high-grade cigarettes and cigars. A prominent tobacconist stated this morning that he is quite convinced that the Government obtained more revenue from these importations in the past than it does today. Some interesting facts concerning the increase iu tobacco and cigarette duties were gathered this morning and judging by the small amount of profit, left for tobacconists, business in future will be an extremely difficult proposition for them. A case of 10,000 qigars costs £34 in Manila, where they are made. The duty on a case to land in New Zealand amounts to £97, which must be passed on to the people who smoke them. The popular belief is that the cigar is a rich man’s privilege. Tobacconists. however, explode this theory. Until cigars were so heavily taxed the working man and the middle class were the heaviest cigar smokers. because they were comparatively cheap and a satisfactory smoke. TENDENCY TO FALL. There has be*n a world tendency for cigar production to fall but this has been accelerated by the imposition of heavy duty. 'Before the war we sold more cigars in two months than we now sell in a ?,^ ar ’ a tobacconist said this morning. "Some of the better grades will not now be worth importing.” Cigarette tobacco, which the thrifty man preferred and from which he made his own cigarettes, has been very heavily hit and is rapidly becoming prohibitive. In 1920 the duty on a case of 100 lbs. of cigarette tobacco was £l7 or 3s 6d a lb; last year the duty on a 100 lb case had risen to £SO or 10s a lb; the present duty is £6S 10s, a 100 lb case or 13s 9d a lb. This means of course that the duty has risen from 25-8 d an oz. in 1929 to approximately 101 dan oz. today. In 1920 one of the popular brands of cigarette tobacco cost 11s 3d a lb. wholesale; today that same tobacco costs 25s 6d a lb. wholesale. No wonder the tobacconists are finding it difficult to carry on business. Before the war the duty was 17s 6d a 1,000 on ordinary cigarettes which were sold in packets of 10 and which were the popular brands for the average smoker. In 1929 the duty had risen to 25s 6d a 1,000, and today the duty has increased to 33s 9d a 1,000. The one penny increase in price which has been passed on to the public on these brands does not actually cover the increase in customs duty. Since the imposition of the new duties working men particularly have been reduced to smoking the cheaper grades of tobacco. Many have threatened to give up smoking altogether, some of the tobacconists say. Thus, it seems, the Government will lose a good deal of its revenue.