Denmark - veggie price increases triple that of cigarettes..

July 31, 2009 - The state has allowed the cost of cigarettes to stagnate while vegetable prices have soared. Over the past 30 years the price of vegetables has risen three times as much as that of a pack of cigarettes, according to figures from Statistics Denmark.

Cigarettes cost 136.4 percent more now than they did in 1979, while prices on vegetables on average have jumped 383 percent since then. If cigarette prices had risen at the same pace as veggies, a pack would now cost around 90 kroner (17.34USD). But the government, under new prime minister, Lars Løkke Rasmussen, recently indicated it would not implement a proposal to raise the price of fags to 50 kroner (9.58USD)a pack.

Instead, the government will add three kroner (0.58USD) to the cost, making the average price of a pack around 36 kroner (6.89USD).

Jes Søgaard, head of the Danish Institute for Health Services Research, called the development ‘an anomaly’. ‘There’s basically a price elasticity between -0.4 and -0.8 percent for goods such as alcohol and tobacco,’ he said. ‘In actuality that means when prices are increased by 10 percent purchases fall by around 5 percent.’ Søgaard said that, in particular, taxes on luxury items have not kept up with other cost increases.

According to statistics, the overall retail price index has increased by 200.7 percent since 1979.

Tobacco in Denmark..

Reference: Veggie price increases triple that of smokes, The Copenhagen Post Online, 4/29?2009.