Australian Lawmakers fuming over BAT low-cost cigarettes

Australian Health Minister, Tanya Plibersek, strongly criticized a move by British American Tobacco Australia to introduce cheap cigarette brands to Australian tobacco market.

Benson & Hedges cigarettes in Australia

British American Tobacco – which manufactures such brands as Lucky Strike, Benson & Hedges, Vogue, Winfield, Dunhill and other brands – launched “Just Smokes” brand, available in stores across the nation for roughly 11.50 Australian dollars (nearly $11.40) per pack of 25 cigs.

A pack of 25 cigarettes retails for 16 Australian dollars on the average, mainly due to the high duties on tobacco products.

British American Tobacco Australia states it is obliged to sell low-cost cigarettes in order to be able to compete with counterfeit and contraband tobacco products massively available on black market, and according to the cigarette maker’s spokesman Scott McIntyre selling for not more than 10 Australian dollars.

Australian Minister of Health admitted she was most concerned over the impact on adolescents.

“It is an open secret that majority of smokers are very susceptible to price fluctuations, and most of these price-sensitive smokers are adolescents,” she said.

“Teenagers and young adults who are only beginning to smoke, have been more likely to light up if cigarettes are less expensive.”

Mrs. Plibersek also said that she was more than suspicious of the tobacco giant’s motives.

“What they are definitely interested in is promoting tobacco, retaining current smokers and luring new ones, and they will do what they can to reach their objective,” she said.

“Whenever the Government has adopted new anti-smoking measures, including tax increases, plain packaging or graphic warning labels, tobacco industry complained these moves will not be effective in reducing smoking rates. Yet, by launching inexpensive cigarettes they have worked to decrease smoking rates.”

The Australian newspapers cited the BATA spokesperson McIntyre who said that a 25-percent rise in excise taxes on tobacco products introduced in Australia in 2012 meant that low-cost cigarette segment had added 63 percent.

“Today, the tobacco industry has been extremely responsive to smokers requirements, so in case adult smokers continue to buy cheaper cigarettes, that’s were the tobacco companies will compete for market share, that is likely to lead to further prices decrease,” McIntyre reportedly stated.

“Adult smokers have been turning to cheaper cigarettes or illicit products, so the industry is forced to enforce competition. In case the Australian government will not stop introducing ad hoc excise tax hikes, it could only result to making the problem even more complicated.

“The lawmakers are trying to decrease smoking rates by increasing taxes, but it is forcing people to switch to illegal or cut-price products instead.”

In the meantime, British American Tobacco Australia, is one of the tobacco companies trying to overrule the Australian government’s law approving plain packaging for all cigarette brands starting from this December.

The cigarette makers are arguing the new legislation — which requires all cigarette packs to be sol in the same olive-colored pattern – will violate their trademark.

The lawsuit is before the High Court currently.

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