Cigarettes are more expensive than before the lockdown ban – and it is about to get worse
- Cigarettes are more expensive than before lockdown, an anecdotal comparison with historical price data shows.
- Premium brands such as Camel have shot up by as much as 35%, while mid-market brands such as Winston have stayed level.
- More bad news for smokers: the prices of certain cigarette brands, including Peter Stuyvesant and Dunhill, will go up on Monday next week.
- British American Tobacco says the price increases are necessary to claw back some of the revenue lost during lockdown.
- For more articles, go to www.BusinessInsider.co.za.
It's not your imagination: some cigarette brands really are more expensive than before they were banned under South Africa's coronavirus lockdown. And the bad news is that they're about to get even pricier.
Business Insider South Africa compared the prices of popular cigarette brands before and after the lockdown. We used historical price data from the Research Unit on the Economics of Excisable Products (REEP) at the University of Cape Town, led by Professor Corné van Walbeek. The research unit has published a number of studies on the price increases of illegal cigarettes during the lockdown.
We compared those historical average prices to our own survey of post-lockdown prices in Cape Town this week.
That shows how the prices of premium brands, such as Camel have skyrocketed by as much as 35%, while the prices of mid-market brands such as Winston and Rothmans have stayed about the same, even getting slightly cheaper. Marlboro is 30% more expensive, while Peter Stuyvesant is 19% more expensive.
The table below shows the pre-lockdown price compared to the current price, followed by the percentage difference.
It's important to note that we're comparing REEP's pre-lockdown national average prices to our own survey of post-lockdown specific prices at retailers in Cape Town. REEP's data is an average price, that takes into account region and type of retailer. That means the data can't strictly be compared, but can provide only a rough indication – and supports complaints by smokers around the country.
Prices are going to go up even more
Prices are definitely about to increase, though.
In a letter to retailers, British American Tobacco South Africa (Batsa), the largest cigarette manufacturer in South Africa, said it will be raising the prices of its brands, including Peter Stuyvesant, Pall Mall and Dunhill, by between 4% and 10% to try and claw back some of the revenue lost after nearly five months of tobacco prohibition.
Prices will go up on Monday, 24 August.
This official price increase is in addition to the unofficial price increase presumably driven by retailers also trying to get back on their feet financially.
"This will have a negligible impact on the losses suffered during the prohibition on legal sales but it will, we believe, allow us to continue supporting or partners in the legitimate value chain," said Batsa in the letter, dated 17 August.
“South Africa's tobacco value chain lost millions of Rand [sic] of urgently needed income over the last 140 days of unjustifiable tobacco and vapour sales ban,” said Batsa.
“Throughout this very difficult time, not once did we contemplate de-invest [sic] from the country, but continued to support efforts to preserve lives, livelihoods as well as fight for the right of out consumers to be able to buy the quality products that they had become accustomed to.”
Tobacco groups have also indicated that smokers do not seem to trust that the ban will stay lifted, with smokers buying months of supplies at a time.
Bongani Mshibe, director of corporate affairs and communication at JTI Southern Africa, which manufactures Camel, told Netwerk24 that some retailers sold twice as much on the first day the ban ended as they usually sell in a month
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