Are cigarettes so expensive that it’s making Hungarians quit?

It seems that the price of cigarettes has reached a level that is forcing Hungarians to take action. The last two excise duty increases raised the price of cigarettes by 200-250 forints; moreover, the rise in prices came suddenly, not gradually, as in recent years. 23 per cent of smokers asked in the Pulse and Daily survey said that the price of 1,700-1,800 forints is too high, so they will quit.

The Hungarian government finally raised the excise duty on cigarettes to the minimum level required by the European Union. This was requested by a 2011 directive that gave Hungary until 2017 to reach the desired tax rate. Although Hungary raised the tax in recent years, it has not complied with EU rules at that time. That is why the European Court of Justice condemned Hungary, the decision of which was published last week.

Excise duty on cigarettes:

• must be at least EUR 90 per 1,000 cigarettes,
• must reach 60% of the weighted average price,
• or it should be a minimum of EUR 115 per 1,000 cigarettes

According to the court, Hungary had already met the requirements in January, and since then, there has been another increase, now on 1 April.

Compared to November-December 2020, now in March-April, the price of a box of cigarettes may have risen by 200-250 forints, which is a great and sudden increase for smokers. A box of cigarettes costs 1,700-1,800 forints now. If someone smokes one box a day, they have to pay more than 51-55 thousand forints a month for cigarettes only, which is half of the net minimum wage.

• Hungary has the second-lowest minimum wage in the EU
• Four international retail chains leave Hungary due to COVID-19

Napi.hu asked Hungarian smokers if they would change their smoking habits due to the current increase in prices, or if they had done so before.

31 per cent of the population over the age of 18 reports smoking, which is roughly in line with recent surveys and accounts for nearly 2.5 million people.

A very significant proportion of smokers, 23 per cent, said that the price of 1,700-1,800 forints would be too high. It is obviously not an easy decision, yet it is a good indication of the financial burden this decision puts on smoking Hungarians.

10 per cent of respondents said they were switching to rolling their own cigarettes. The government is aware of this. It is no coincidence that in parallel with cigarettes, it has also raised the tax on fine-cut tobacco, even though its level has long been in line with EU requirements.

Eight per cent of people will choose electric cigarettes or heated tobacco products, but 22 per cent will not change their habits despite the increase in prices, and they will buy the cigarette no matter what it costs.

The largest group of respondents, 37 per cent, said they had previously looked for some alternative, which could be electronic or some smoke-free technology.

In the last few years, the statistics of the National Tax and Customs Administration show that cigarette consumption is declining, albeit to a small degree. The high price will mostly get people over the age of 60 to quit smoking, which is no wonder given the pensions.

A similar picture is shown by educational attainment. A third of those with a basic education plan to put down cigarettes and only 15 per cent would continue. In contrast, 40 per cent of graduates do not care about the price.

It is also interesting that there is barely anyone among the graduates who would now switch to some alternative; however, 45 per cent of them stated that they have done so before.

Quitting is mostly planned by people living in smaller towns and villages. More people will continue to buy cigarettes in Budapest and county seats.

Read alsoEurostat: Hungarians are one of the most worst-paid people in the EU

Source: Napi.hu