Industry & Economy
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Budget
Smokers may downgrade
Our Bureau
Kolkata, Feb. 29
Most regular smokers Business Line spoke to in the CBD area of Kolkata could not exactly understand the actual impact of the Budget hike in excise on non-filter cigarettes. As a committed consumer group, they, however, admitted that shifting to less costly brands was quite possible, especially if their favourite Scissors or Charminar (popular non-filter brands) were to cost more now.
Preliminary industry feedback to the customary budget hike in excise on cigarettes hints that the higher price impact was likely to be on the lowest slab of below 60 mm cigarettes (also known as the micro segment) and on those between 60 mm and 70 mm. Cigarettes, generally, have some five or six price slabs, and the current excise impact of more than 100 per cent hike in cigarette prices is said to be on the lowest slab, which was just above the bidi segment.
Asked whether some of them would now shift to bidi, if their regular non-filter cigarette gets beyond reach, the consumers’ answer was “do not know”.
One thing, however, is quite clear: Nobody is going to give up smoking just because it has become costlier.
Knowledgeable industry sources, interpreting the move by the Finance Minister to substantially raise excise on non-filter cigarettes, mainly as a deterrent and measure to check tobacco control (from a health point of view) feel this may only prompt the smoker at the lowest end to switch further down to bidi.
It is learnt that the excise hike may uniformly impact the topline of all major cigarette players, especially those having a significant market presence in the non-filter segment.
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