March 8, 2011 - Leading chains of convenience stores cut the cost of cigarettes by HK$2 (0.26 USD) to match news-stand prices, reversing an increase that had been introduced at about the same time as the higher tobacco tax in last month's budget. Both 7-Eleven and Circle K now sell cigarette packs at HK$50 each, on a par with news-stand prices.
The chains raised cigarette prices by HK$2 to HK$3 on top of the HK$10 (1.28 USD) rise in tobacco tax last month. Sales at one 7-Eleven store dropped by more than half, while business at news-stands was unaffected, the South China Morning Post (SEHK: 0583, announcements, news) reported on Monday. (Hong Kong - Tax increase adds HK$10 (1.28 USD) to cigarette price..)
A spokeswoman for 7-Eleven said: "The price of tobacco has been adjusted after negotiation with major suppliers." At 7-Eleven, the reversal was announced through an internal memo on Saturday.
One shop manager said the company made the about-turn to win back lost business. "As I understand it, the wholesale price of cigarettes remains unchanged," he said.
Before the tax increase, his outlet sold about 400 packs of cigarettes a day. That fell to about 170 after the rise. He said that after the HK$2 increase was withdrawn on Saturday, sales improved 10 per cent. "The customers are gradually coming back to us," he said.
The price increase at convenience stores sparked an outcry among smokers, with some of them organising petition campaigns on Facebook. One of the smokers, Ada Cheung, said on the social networking website that the price cut was a "victory". But others said they would continue to buy cigarettes from news-stands as a show of support for small businesses.
Hong Kong Newspaper Hawker Association vice-president Tang Yap-ming said cigarette sales at news-stands were bound to be affected by the price reversal. "We cannot do anything about it. It's a natural adjustment in the market."
The tobacco tax was raised on February 23. The Department of Health's quit smoking hotline has been receiving more than 240 calls a day since the financial secretary delivered his budget speech, which included the tax rise. That figure was more than six times the daily average of 38 calls received last year.
Reference: 7-Eleven and Circle K reduce tobacco prices, Ng Yuk-hang, South China Morning Post, 3/7/2011.
Hong Kong related news briefs:
Hong Kong - Tax increase adds HK$10 (1.28 USD) to cigarette price..;
Hong Kong - govt officials meet with tobacco companies ahead of next week's budget..;
Hong Kong - Council on Smoking and Health has called for a raise in tobacco tax to at least 75% of retail price..;
Hong Kong - latest survey - proportion of smokers in younger age group dropped by 10%..;
Hong Kong - as of December 1st smoking ban extended to 131 bus terminals..;
Study - many benefits including improvement in your sex life when you quit tobacco..;
Hong Kong - from August 1, incoming passengers allowed to import a maximum of 19 cigarettes, one cigar or 25 g of cut tobacco..;
Hong Kong - ways to beat the smoking ban..;
Hong Kong - smokers defy smoking ban, no penalty for owners of
China - can they learn tobacco control from Hong Kong??;
Hong Kong - 50% increase in tax on tobacco products approved..;
Hong Kong - cigarettes too cheap, tax only 61 and 66 percent of retail price..;
Hong Kong study - further proof, women have a harder time quitting cigarettes..;
Hong Kong - as of November 1st no tobacco advertising at newsstands - now display boxes..;
Member states of WHO's Western Pacific region agree to new tobacco control action plan..;
Hong Kong - Is the fixed-penalty fine for smoking offenses effective?;
Hong Kong - more unions are starting to enforce extended smoking ban..
Hong Kong - unions refuse to hand out penalty tickets for smoking..
Hong Kong - tobacco smokers may be prone to developing life-threatening complications from swine flu..;
Hong Kong - total smoking ban in full force no exceptions..
Hong Kong - total smoking ban in effect - Wednesday, July 1, 2009..;
Hong Kong - smoking statistics..;
Hong Kong - movie poster woman smoking - NOT ALLOWED..;
Hong Kong - bar owners an employees march to protest smoking ban starting July 1, 2009..;
Hong Kong - attempt to delay July 1, 2009 smoking ban fails..;
Hong Kong - cigarette smuggling soars after tax increase..;
Hong Kong - Tax on cigarettes pushed up by 50 percent..;
Honk Kong - smoking increase raise tobacco duties??;
Hong Kong - temporary smoking ban exemption ends July 1, 2009..;
Hong Kong - after smoking ban cigarette consumption up 14 percent..;
Hong Kong - public smoking ban - smoking rooms??;
Shanghai Tobacco's Golden Deer Cigarettes - Hong Kong..;
More on Philip Morris International of the Future...