- Dec 3, 2014
I don't want to live in a world where tobacco and alcohol does not exist. With government pushing higher and higher taxes on tobacco and alcohol products, we are seeing a trend in the UK and other markets where users are resorting either to black markets or to legal substitutes such as Vapers or electronic cigarretes. According to ASH.org the high level of tax on tobacco in Britain has two purposes: to reduce smoking through the price incentive, and to raise taxes from a source that has least impact on the economy Tobacco Tax Revenue. My concern here is that if we come to a point where politicians start raising tax beyond Laffer's danger zone1, more and more people will be driven to tobacco substitutes or substandard tobacco products that will be available in black markets. This could have an impact in our way of life and create the conditions where pipe tobacco companies could go busted. Let us not forget the pipe tobacco industry is a dying one due to the popularity cigarettes have in our society, so the more pressure politicians put into this industry, the more likely they are to decrease sales, which in turn, will have an impact on all incentives tobacco companies have to produce and sell tobacco products due to decreasing margin profits. If we see the laws of demand together with tax pressure on consumption, it will be easy to see how this is putting pressure on all tobacco companies to assume part of the tax burden in order to stay open for business. My question is this. How do you all see the future of pipe tobacco in the short/long term if taxes keep rising on tobacco products?