British smokers turning to cheaper RYO but NOT in the U.S..

/Bahrain_map.jpgApril 14, 2009 - As a result of the economic crisis British (Britain, United Kingdom, UK)smokers increasingly turning to cheaper hand-rolling tobacco (RYO) to get their nicotine fix. In the United States RYO may no longer an alternative. As of April 1, 2009 the federal government changed the price structure so there no longer is an advantage to this method. The old roll your own tobacco tax = $1.09 per pound. Now - the tobacco tax = $24 per pound - a 2400% increase. (Federal tobacco tax to go up in April) Tom Briant, executive director of the National Association of Tobacco Outlets (NATO) thinks RYO in the U.S. will survive but it will be different and sales will drop.

According to Imperial Tobacco, Britain’s biggest cigarette company and the owner of Golden Virginia and Drum, the volume of hand-rolling tobacco sold by the group in the UK rose by 7 per cent to 3,750 tonnes last year and the company believes it is on course for another significant increase in 2009.

While it is difficult to compare the price of ordinary cigarettes with rolling tobacco – because roll-up smokers choose how much tobacco they use in each cigarette – the recommended retail price of a packet of 20 Lambert & Butler, a cheaper brand, is £5.22 (7.78USD). A 12.5gm pouch of rolling tobacco costs £2.99 (4.46USD), while a 25gm pouch costs £5.87 (8.75USD). Part of the reason why rolling tobacco is cheaper is that HM Revenue & Customs (collect the bulk of UK tax revenue) charges less tax on loose tobacco. The average tax take on a packet of cigarettes ranges from between 75 and 90 per cent of the total price, whereas roll-your-own tobacco is taxed at just below 70 per cent.

Reference: Too skint to light up — roll ups make a comebackby Suzy Jagger, TimesOnline, 4/13/2009.