ANY shop selling cigarettes at the new prices is doing so illegally and pocketing the profits, as suppliers have yet to sell stock with the new VAT hikes included, a leading cigarette supplier confirmed yesterday.
In a circular letter sent to all cigarette and tobacco sellers yesterday, suppliers Cassandra Trading Ltd stressed it had not yet issued stock with the new VAT hikes included.
Anyone selling them at increased prices is not just profiteering, but is doing so in full violation of the law, an insider from the company confirmed yesterday.
Cassandra Trading – which imports the brands Marlboro, Philip Morris, L&M and Virginia Slims, among others – accompanies its letter with a pricelist on how much cigarettes and tobacco will cost once the supplying company imposes the new VAT – “as a contribution towards combating profiteering”.
The company’s letter follows over a week of complaints by kiosks and other outlets over the suppliers’ delays in providing them with new stock, but also revelations that some stores had in fact increased their prices immediately after the new law was passed.
“After the sudden, new increases in tax on tobacco products, which were passed on December 10, 2010 and apply to products that are cleared after this date, we would like to inform you on our company’s new pricelist,” said the letter. “This pricelist will start to apply once we have fully exhausted the reserves that have already been cleared by the Customs Department using the previous taxing system.”
A spokesman for Cassandra Trading yesterday told the Cyprus Mail that the new stock is not expected to start being supplied until at least Thursday.
“Whether it is Wednesday, Thursday or Friday, we can’t be absolutely sure; but our calculations show that it will be roughly on Thursday,” he said.
But one thing was an absolute certainty: there is no way the old stock will run out by the end of tomorrow. “We are absolutely positive that there will still be old stock on Monday,” said the spokesman.
This means, any kiosk or shop selling tobacco products at increased prices until at least the end of tomorrow is doing so in violation of the law.
And in this case, Commerce Minister Antonis Paschalides yesterday said the regulations were clear: “The Customs Department has the complete authority to intervene and launch proceedings for criminal prosecution.”
However, the minister has pointed out that that there is no way for his ministry – or any other ministry – to intervene when retailers are profiteering and it is up to the consumer to decide whether to buy a product or not.
On Friday, the head of the Customs Department, Costas Nicolaides, said a few isolated cases had been spotted where retailers were caught overpricing tobacco products immediately after the VAT rise was passed a week and a half ago.
Nicolaides said the necessary recommendations had been made and procedures followed.
According to Cassandra Trading’s new pricelist, Marlboro KS, Marlboro KS Soft, Marlboro Gold, Marlboro (Gold) KS Soft, Marlboro Silver and Marlboro Flavor Plus will be sold at €4.40 – maximum price – from around €3.90 now.
Marlboro Gold Touch and Marlboro Gold Prime Touch will be sold at €3.80; Philip Morris Supreme, Philip Morris One and Philip Morris SuperSlims will cost €3.90, while Philip Morris Blues will cost €3.45.
All L&M brands will be sold at a maximum price of €3.50, from around €2.90 they cost today, while Old Navy Red and Old Navy Blue will with the new prices cost at the most €3.70.
Virginia Slims (Black) and Virginia Slims (Pink) will cost €4.40.
The new VAT hikes have increased the tax for cigars and cigarillos from €68.34 per kilo to €90.
The increase for rolling tobacco was especially steep, raising it from €34 to €60. This means a 50 gram packet will increase by €1.27, while 25 gram packets will increase by €0.64.
The Finance Ministry expects the new measures will bring in €31 million a year, taking the state’s revenue from tobaccos products to around €210 million annually.
Meanwhile, the House Health Committee Chairman, DISY’s Costas Constantinou, yesterday said his committee was willing to re-discuss the smoking ban in nightclubs.
Constantinou said discussions would start with all implicated parties after Christmas to discuss the problems that arose after the law was implemented over the past year.
He said there were ways to reach consent and impose smoking ban in public venues.
