(Illustration) Packages of Marlboro Red. – Igor Golovniov / SOPA Ima / SIPA
The price of the package of Marlboro, the best-selling brand of cigarettes in France, will reach the symbolic bar of ten euros on March 1,
under the effect of a tax increase which has reduced sales and aims to reduce the
smoking in France.
Published in the Official Journal on Tuesday, a ministerial decree dated January 31 sets the new prices, up due to the application of the first tax hike of 50 cents, scheduled for this year – the second being scheduled for November 1 by government. “The government wanted to reach an average price of a packet of cigarettes at 10 euros in November 2020, but there the most expensive brands are already there,” said a cigarette manufacturer who did not wish to be identified.
Increases of up to 70 cents
From next month the Philip Morris group, whose market share is 40% in France, including 26% with its flagship brand Marlboro, will now sell the package of Marlboro Red at 10 euros, against 9.30 euros currently. Another of its best-selling references increased by 60 cents: the Winston’s went to 9.60 euros. The market leader therefore passed on the increase of 50 cents, and at the same time increased its margin from 10 to 20 cents per package.
At the competitor Japan Tobacco International, the price of Camel without filter goes to 9.80 euros against 9.10 euros, again an increase of 70 cents. The Marlboro package is not the most expensive sold in France, however: the Gauloises brunettes from Seita (French subsidiary of the British Imperial Brands), which already cost 10 euros since November 1, rose to 10.60 euros, and the Brown Gypsies at 11 euros, against 10.50 euros previously.
In France, tobacco manufacturers set their selling prices, but the state can encourage increases by varying taxes, which represent more than 80% of the price. Each manufacturer then decides to maintain, trim or increase its margins, depending on the competition and its pricing policy.
Fall in sales
After the presidential election in May 2017, the government ended four years of price stability, sharply raising taxes to bring the price of the package to around 8 euros on March 1, 2018, and since then making two annual increases 50 cents, programmed one in March, the other in November, with the stated aim of reducing tobacco consumption.
These price increases caused sales to drop 9.32% in 2018 and 7.2% last year. According to the tobacco companies, this strengthening of the tax system is causing the parallel market to explode. Evidenced by “customs seizures of illicit tobacco more and more,” said to AFP Pascal Marbois, director of public affairs of British American Tobacco (BAT) France.
Parallel trade
Among BAT’s flagship products, the price of the Lucky Strike Bleu Classic will go up to 9.40 euros on March 1, compared to 8.90 euros previously, and that of the Winfield Rouge drops to 9.60 euros. “France continues to go it alone with a tax shock policy disconnected from neighboring countries,” says Pascal Marbois, calling “the authorities to a more pragmatic policy focused on risk reduction and promotion of vaping” which “has its evidence in terms of an alternative to smoking ”.
Seita also said he feared “a fall in tobacco deliveries to cross-border regions, which are suffering from parallel trade: they have already dropped by 10 to 15% last year,” said Cyril Lalo, his head of institutional relations.
On the anti-smoking side, it is estimated that government policy, which combines a rise in prices with other measures – reimbursement for smoking cessation treatments, neutral package – but also the rise in vaping, has motivated a significant number of people. to stop smoking. First cause of preventable mortality, tobacco kills some 75,000 French people each year.
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