Cigarettes rationed after sales rush

PUBLISHED : Saturday, 19 February, 2011, 12:00am
UPDATED : Saturday, 19 February, 2011, 12:00am

With demand for cigarettes aflame in anticipation of a potential tax rise, the city's convenience stores and news vendors are limiting sales to two packs per customer.

A spokeswoman for Dairy Farm, which owns 7-Eleven, said each customer was allowed to buy two packs of tobacco products in each transaction because of tight supply and to 'provide convenience for more customers'.

A spokesman for Li & Fung Group, which owns Circle K, said all branches started limiting sales to a maximum of two packs per transaction yesterday. The sales limit will be removed when the supply and demand situation became stable, she said.

The government is under pressure from doctors, health groups and the anti-smoking lobby to raise the tobacco tax. The consensus is that the tax will be set at 75 per cent of the retail price or higher, up from 62 per cent. This would add about HK$5 to a pack of cigarettes but still leave them among the cheapest in the developed world.

Alarmed by the tax talk, many people had been snapping up cigarettes in the past week, the chairman of the Newspaper Vendors Association, Liu Sair-ching, said. 'More and more people are buying. Some have bought dozens at a time,' said Liu, whose association has more than 500 news vendors as members. He said he expected the buying spree to intensify. Worried that businesses would be hurt if the government increased the tax in the upcoming budget, Liu organised a protest yesterday against the potential rise. About 20 news vendors took part.

A third of their revenue came from selling cigarettes, Liu said. 'The last time it was increased - last year - it took away 30 per cent of business from us,' he said. 'If the financial secretary increases it again this time, it's going to be another blow to our businesses.'

From 1990 to 2002 the government raised tobacco tax nine times.