Although the excise on cigarettes went up in July 2008, smokers only started paying more in November. Cigarettes were sold for old prices for four months. As a result the increased excise was not reflected in the inflation rate. It generally takes about two months for retailers to start selling new stocks. As the excise increase was announced well beforehand this time, traders were able to stock up more for the old prices.
In November 2008 tobacco items cost 8.4 percent more than in October. This was the result of substantial price rises for cigarettes and shag tobacco. Earlier this year prices had already been raised by 4 percent. This makes cigarettes 12.5 percent more expensive than twelve months ago.
In 2004, too, cigarette prices rose substantially: by 19 percent. Half of this increase was caused by an increase in excise on 1 February 2004. Consumers were able to buy old stocks until April.
The effect of excise and VAT on smoking is substantial. Smoking now costs twice as much as in 1995. Without excise and VAT increases, the increase would have been 40 percent. Overall inflation since 1995 is 33 percent.
Prices of tobacco articles