Czechs smoked less during Covid-19 outbreak but paid more due to tax hike
Cigarette consumption in the Czech Republic dropped by more than 60 million over the past year, Czech Radio reported on Tuesday, citing data by the agency Nielsen. The biggest drop in consumption was recorded in March and April, when a state of emergency was in place in the Czech Republic.
Despite the drop in consumption, smoking is becoming an increasingly expensive habit. After a recent tax hike on cigarettes and other tobacco products, Czech smokers now have to pay an extra 13 crowns for a packet.
According to Czech Radio, it is the steepest one-off increase in the country’s history. In view of the situation, tobacco companies are expecting to see an increase in sales of illegal cigarettes and an inflow of cheaper cigarettes smuggled from abroad.
At the start of the year, every tenth cigarette smoked in the Czech Republic came from the black market. However, illegal trade was temporarily slowed down by the onset of the coronavirus pandemic.
Although the number of cigarettes smuggled into the Czech Republic during the emergency state dropped, production of fake-brand cigarettes went on uninterrupted.
“One such example is the exposure of an illegal factory for fake-band cigarettes in Horšovský Týn at the end of April, which produced cigarettes even during the lockdown,” Petr Šebek of the company Philip Morris told Czech Radio.
“After the reopening of borders, the sale of illegal cigarettes was quickly restored, so we expect the numbers to increase, Mr Šebek told Czech Radio.
According to tobacco firms, the illegal cigarette trade in the Czech Republic is driven mainly by Ukrainians and Belarussians.
According to Czech Radio, the hike in cigarette prices caused many smokers in the Czech Republic to look for cheaper, alternative brands.
“For instance a packet of Marlboros, which used to sell for around 100 crowns, currently costs 119 crowns. That is a big hike and it forced many people to buy cheaper brands,” says Roman Slavík, deputy head of the Czech and Moravian association of tobacco sellers.
The price of a packet of Marlboros, which sold for 84 crowns back in 2010, is likely to rise even further in the future.
Under the plan of the Ministry of Finance, consumer tax on cigarettes and other tobacco products will continue to increase over the next three years, by about five percent annually.
Czech tobacco companies estimate that smokers will pay an extra four crowns for a packet of cigarettes, starting next year.