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Cigarette price hike has smokers fuming

Tobacco tax awaiting Parliament approval would help ease deficit

By Iva Skochová
Staff Writer, The Prague Post
September 6th, 2006 issue

The price of cigarettes is set to increase steeply as the government eyes easy ways to reduce a growing budget deficit.

Finance Minister Bohuslav Sobotka has proposed the largest tobacco price hike in recent years, and the Cabinet approved the measure Aug. 30. If Parliament follows suit, the price of a pack will go up 15 to 40 percent next year, depending on the brand.

"The increase will bring an extra 10 billion Kč [$45.5 million] into the state budget," says Jaroslav Růžek, the Finance Ministry's spokesman. "Unless, of course, there are fewer smokers because of the cost."

Zdeňka Svobodová, an anti-smoking consultant at the Masaryk Oncology Institute in Brno, says the price increase will not encourage everyone to kick the habit, but it will certainly help.

"People should be [exposed to] anti-smoking messages everywhere," she says.

The increase comes as another step in a series of anti-smoking initiatives. On April 1, the country adopted its first price increase this year, which will be reflected in retail this fall, and banned smoking in some public places, such as tram and bus stops. Billboards featuring children with cigarettes have popped up in the city to encourage tougher regulation on smoking for minors.

Milan Gujda owns Monarch, which has two wine bars located in New Town that are nonsmoking. Nevertheless, he calls the price hike a threat to personal freedom.

"We did it just to accommodate the customers and employees," he says. "Other than that, I think [the price hike] is discrimination against smokers."

Smoking your taste buds off

Like a growing number of other European countries, the Czech Republic is moving closer toward banning smoking in all public places. There are only a handful of nonsmoking restaurants and bars throughout the city, but the number is growing.

Most ban smoking for specific reasons: either because of the gourmet food or wine on offer or because they fall into the trendy "healthy living" category, such as vegetarian restaurants and teahouses.

Gujda says that tasting wine and smoking just don't go together. "We have customers who take wine seriously and don't expect to do it in a smoky room," he says.

While gourmets might maintain that cigarette smoke dulls the taste buds, they remain in a minority. Most other Czech bars and pubs are synonymous with thick smoke and poor ventilation. In a country where an estimated 30 percent of people smoke, tobacco regulations of any kind tend to cause a stir.

"It is mad," says Petra Bláhová, a 19-year smoker, about the price increase. "What's next, prohibition?"

Almost 800,000 Czechs 18 and younger smoke, 60 percent of whom are 15–18, according to the organization Chain of Love.

"The number of adolescents who smoke keeps growing," says Svobodová. "Once they start smoking, the higher price won't discourage them. Prevention is the key."

The real cost

Tobacco contributions to the state budget:

  • 2004 - 21.5 billion Kč
  • 2005 - 25.5 billion Kč
  • 2006 - 36.5 billion Kč*
  • 2007 - 46.5 billion Kč*


  • * Estimated amounts

    Source: Finance Ministry

    Current cost of a pack of Marlboros in Europe:
  • Czech Republic 60 Kč*
  • Slovakia 80 Sk (60 Kč)
  • United Kingdom £5.70 (239 Kč)
  • Austria 3.10 euros (87 Kč)


  • * Current price; rises to
    81 Kč in 2007

    Smoke-free Europe?

    While the number of smokers in Europe has decreased 15 percent in the past 10 years, the number of Czech smokers has actually increased, up 4 percent since 1997, according to the State Healthcare Institute.

    Analysts say that while the dramatic price increase will probably result in a decrease in cigarette sales, it might not affect consumption. If anything, people will switch from international brands to cheaper, local names.

    According to Richard Vavřík from Imperial Tobacco, increasing the price of cigarettes here might actually be a boon to the illegal cigarette trade. There might be more brands smuggled in from places like Ukraine and Russia, he says.

    Countries with high cigarette prices, such as the United Kingdom and France, have experienced not only smuggling but also so-called cigarette tourism. Because cigarette prices vary greatly across Europe, it encourages smokers to buy cigarettes in bulk in countries where they are cheaper. Even if the cost of a pack of Marlboros goes up to 81 Kč next year from the current 60 Kč, it is still a bargain for British tourists used to paying up to £5.70 ($10.86/239 Kč) at home.

    According to the Finance Ministry, the planned price increase is a result of a European Union requirement that all member states implement at the very least the lowest tobacco tax tariffs allowed by Brussels by next year. Another increase is planned for 2008.

    Iva Skochová can be reached at iskochova@praguepost.com


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