Coronavirus: Tobacco giant's price hike on first day of Covid-19 lockdown
Saturday, 18 April 2020
A tobacco company raised prices in New Zealand on the first day of the coronavirus lockdown.
An anti-poverty campaigner is condemning the move by British American Tobacco as opportunistic and underhanded.
Smokers are also fired up about the timing and have complained to a consumer watchdog.
The company says the price hikes, normally made at the start of the year when taxes rise, came later due to unspecified 'market dynamics'.
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British American Tobacco New Zealand sells cigarettes under brands including Dunhill, Benson & Hedges, Rothmans, Holiday and Pall Mall.
A spokeswoman acknowledged the company had recently increased the price of some products.
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The new prices were permanent and were provided to retailers from March 26, the spokeswoman said.
That was the first day of the alert level four restrictions in New Zealand.
While the new prices were given to retailers that day, most service stations and convenience stores implemented the changes between March 30 and April 6.
The spokeswoman said the price hikes were a response to the government excise increase of 10 per cent effective January 1, plus a 1.46 per cent Consumer Price Index increase.
She acknowledged the increases would normally be implemented at the start of the year but said they were not due to 'market dynamics'.
The spokeswoman said by way of example Rothmans Royals 20 packs had increased from a price in 2019 of $26.90 to a March 30 price of $29.90.
Rothmans (of London) 20s increased from $27.90 to a March 30 price of $30.90.
'We understand the frustration that price rises will undoubtedly cause for some consumers and it is our sincere hope that consumers will not react negatively towards retailers,' the spokeswoman said.
Consumer NZ head of research Jessica Wilson said her organisation had received complains from people questioning the price rise during lockdown.
'They're used to seeing price hikes following tax increases at the beginning of the year but have been asking why there has been a rise now.'
Auckland Action Against Poverty co-ordinator Ricardo Menéndez said the group opposed the continued tobacco tax hikes.
In his view, the continued tobacco excise tax hikes were not in line with a harm reduction approach, instead exacerbating the financial woes of people already struggling with addiction.
Menéndez was concerned to hear of the price hike during lockdown.
'It seems like an opportunistic move at a time when people are under stress.
'There is a history of big tobacco just extracting as much money as they can out of low income communities.'
Smokers are more susceptible to lung and chest infections, meaning they are likely to be at increased risk of contracting coronavirus compared with non-smokers.
There is also mounting evidence Covid-19 affects smokers more severely due to the damage smoking wreaks on the lungs, according to Quitline Australia.