China hiked its cigarette tax early this month, and the extra cost has pushed up retail prices.
Although it has yet to show a deterrent effect on smokers, it is conducive to the country's anti-smoking efforts in the long-run, experts have said.
On May 10, China raised the wholesale tax rate for cigarettes to 11 percent from 5 percent. Cigarette wholesalers must also pay an additional 0.005 yuan (less than one U.S. cent) per cigarette sold.
According to the price bureau of Jiangsu Province, the wholesale price of cigarettes there has increased by 6 percent on average.
Data from local price monitoring departments across the country show the tax rise has largely been passed on to consumers. Cigarettes priced under 20 yuan per package have seen a price hike of between 0.5 and one yuan. Those priced above 20 yuan have generally been subject to a price rise of around two yuan per package.
Liu Hongmei has run a cigarette shop at Nanchang University of Jiangxi Province since 2004. "The price has not grown much, mostly from one to two yuan per package, and certain brands are still unaffected," she said.
"But it is the first time I have seen cigarette prices rise during the past 10 years," she added.
Since the launch of the cigarette taxation system in 1994, China has adjusted the tax rate in 1998, 2001 and 2009. Industry insiders speculate that this is the first time taxes have been raised as part of the country's anti-smoking efforts.
Yang Gonghuan, former deputy head at the Chinese Center for Disease Control and Prevention, said the 2009 tax hike was focused on imports and production and was not passed on to the retail price. However, this year's wholesale tax rise will directly affect consumers.
Zheng Rong, professor at the University of International Business and Economics in Beijing, said that prices for some cigarettes have remained unchanged because of large inventory.
"It is likely that cigarettes whose prices have not increased for the time being will see their prices grow in the near future," she said.
CONSUMER INDIFFERENCE
According to the WHO, when the price of tobacco products rises by 10 percent, the number of adults who quit smoking grows by 3.7 percent, and the rate for adolescents is 9.3 percent.
However, for many young smokers in China, the price increase seems to have made little impact on their smoking habits.
A Xiu, a second-year student at Yunnan Arts University, said he usually spends about 300 yuan on tobacco every month.
