Tobacco Pricing – Budget 2013

So, it’s that time of year again, and don’t we all dread it?!

As I’m sure you are aware, by far the largest elements in the price of UK tobacco are the Duty and VAT payable to HM Government.  As a result the annual Budget is a key moment for our business and customers alike.

Over the past few years we have all been hit with some punitive increases in the level of Duty on tobacco, most notably March 2012 when it rose by 5% above RPI.

But its not just our customers that take a hit.  We have tried our best to absorb some of the additional costs of a pouch, but our ability to do so was becoming seriously eroded each year as we found it harder to make savings elsewhere in the business, such as within transport and delivery costs.

It is therefore with some relief that we note the Chancellor has curbed his enthusiasm for attacking tobacco consumers to some degree, and introduced a more manageable Duty increase of 2% above inflation.  Of course, in a perfect world we would expect to pay only RPI at most but we all know this isn’t going to happen any time soon, and considering the current climate of economic woes the 2013 rise is perhaps less than we feared.  This therefore puts the rise at just over 5.2%, thereby increasing the Duty charged on a Kg of pipe tobacco to £96.64, or £4.83/pouch.

As a result our tobaccos will increase in price to the following amounts, with immediate effect:

  • Carey’s Private Blends – £9.90/pouch
  • Tobacco Club – £9.40/pouch
  • Full Samplers – £59.40 (Trad) & £89.10 (Arom)
  • Mini Samplers – no change
  • Carey’s Boutique Blends – £11.20/pouch
  • Carey’s Boutique (Tinned) – £11.50/tin

Despite this increase we are delighted that our prices continue to compare favourably against other high quality tobaccos on the market.  Moreover, the price differential between Carey’s tobaccos and other branded tobaccos continues to grow, making our blends an even more attractive proposition.  In addition, every increase in price further strengthens the argument for our customers to join the Tobacco Club, with a not inconsiderable saving of an extra 50p/pouch against our standard prices the most obvious benefit to Members.  If you would like more information about this simple way of securing favourable pricing on tobaccos, in addition to other Member benefits, please click here.

Once again thank you for your continued custom, and happy puffing!

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2 Responses to Tobacco Pricing – Budget 2013

  1. avatar Martyn lea says:

    Why “with immediate effect” – as a tobacco retailer you must have stock that you have not paid this higher duty on – so if you are charging higher prices right away – does that not mean it is going directly to your profit margin ?

    • avatar Marcus says:

      Hi Martyn – a fair point for a B&M but perhaps a little suspicious of us?! All of our tobacco is held in Bond, which means we pay no Duty until it is despatched to the customer. Our next despatch is Monday, therefore any purchase from the time of the post will be subject to the new charges.

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