BRITISH American Tobacco company has raised cigarette prices for most of its brands by between 53 and 85 percent after the increase in excise duty.
Finance Minister Tendai Biti increased the excise duty on locally produced cigarettes from US$7 to US$10 per 1 000 sticks, with effect from December 1.
The excise duty on imported cigarettes was also increased from 40 percent plus US$5 per 1 000 sticks to 40 percent plus US$7 per 1 000 sticks.
BAT’s Newbury Extra Mild and Kingsize now cost US$1,50 a pack of 20 cigarettes from US$1 and US$1,20 for Berkeley Extra Mild from US65c.
Prices for Madison Toasted, Kingsgate kingsize and Everest menthol have been increased to US$1 from US65c pack of 20 cigarettes.
Prices for Dunhill Full Flavour and Lights remain unchanged.
Other cigarette producers such as Savanna are yet to review prices.
Presenting the 2010 Budget, Minister Biti said the consumption of hazardous and addictive products such as cigarettes was exerting pressure to the fiscus through provision of health care for patients suffering from smoking-related diseases such as tuberculosis and cancer.
Furthermore, he said, the low price structure of locally manufactured cigarettes, compared with prices in neighbouring countries was providing an opportunity for illicit cross-border trade of cigarette products.
This was subsequently negatively impacting on Government revenue.
“It is, thus, necessary that Government imposes measures to discourage consumption of such products and also raise revenue to redress associated social costs,” he said.
Commenting on the price increases, BAT managing director Mr Lovemore Manatsa said: “As a company with a regional and international presence, we recognise the need for responsible sales and progressive alignment in the pricing structures of cigarette products in order to reduce the impact of illicit trade in the region.”
According to Minister Biti, capacity utilisation in the cigarette manufacturing sub-sector has increased from 35 percent in 2008 to about 90 percent this year.
Cigarette volumes have also increased from 689 million sticks in 2008 to an estimate of 1,8 billion sticks this year.
BAT Zimbabwe produced about 1,2 billion sticks last year and is earmarking 1,4 billion this year, Botswana-based Imara Africa Securities said in an August report on the sub-Saharan Africa tobacco industry.
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