Britain to Increase Cigarette Prices by 5%

March 27th, 2012 00:00

Smokers and drinkers were informed by George Osborne that another tax increase on alcohol and cigarettes is going to take effect. The Chancellor declared that duties on alcohol will be raised by 5.4% that will prompt the price of a pint increasing by approximately 10p. The average bottle of wine will now be available at £5.
Tobacco products will increase by 5%, thus boosting the mean price of a package by 36p. George Osborne stated that the increase would come into effect starting from 6 pm tonight.

“We believe that after increasing the price of cigarettes in will discourage people from lighting up,” Mr. Osborne said. The overall increase in alcohol will constitute 4%. Industry experts think that an additional per cent in alcohol taxes would affect positively government finances generating about £60 million and £30 million could be received from 1% increase in cigarette taxes. Tobacco companies have criticized the tax increase on smoking products stating that it will favor the growth of illicit trade. “More and more smokers will switch to black market, where they can buy cigarettes on a more affordable price,” said tobacco representative Simon Clark.

Britain Cigarette Prices

The only people contented with this decision will be criminal groups and tobacco control lobbyists. Rise on alcohol taxes are being implemented under the tax escalator declared in 2008 by the former Government. For instance beer duties have raised 40% since that year. These taxes came despite official inflation estimates demonstrating that prices of alcohol had lifted by 2.5% in February, which was the largest increase for the month. Recent inflation findings show that the rate of inflation on main beverages has increased greatly since December 2011. The given increases will probably anger those working in the pub and brewing industry who blamed the Coalition of putting about 1 million jobs at risk with the given changes.

“We think that it is not right that pubs have to pay 20% value-added tax on food when supermarkets pay nothing,” Tim Martin, chairman of the Wetherspoon pub chain said in an interview. Chief executive Mike Benner added: “The fact that Britons are demanded to pay about 40% of the EU beer tax bill but consume just 13% sold in Europe is striking.

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