Newspaper vendors say tobacco-tax hike could force them out of business

Struggling stall owners fear customers will ditch expensive habit, or turn to black market, as representative says 100 stalls may disappear

PUBLISHED : Monday, 10 February, 2014, 2:31pm
UPDATED : Monday, 10 February, 2014, 2:41pm

As the government considers raising the tax on tobacco, newspaper vendors are fretting over the impact to their cigarette sales – with some worrying it may even force them out of business.

Selling cigarettes brings in about a third of the average stall owner’s income according to Liu Sair-ching, chairman of the Coalition of Hong Kong Newspaper and Magazine Merchants. Since the government last raised the tax three years ago, some 100 stalls in the city had closed, Liu said. About 400 remain.

“The tax increase is a direct hit on our livelihood, the experience in those two years told us that,” he said, referring to the last two tobacco-tax increases in 2011 and 2009.

Speaking on a radio programme on Monday morning, Liu added that some former customers – priced out by the tax rise – had turned to illegal cigarettes.

Last week health officials announced that they are exploring the possibility of raising tobacco taxes ahead of the financial secretary’s budget speech on February 26.

Lisa Lau Man-man, chairwoman of the Council on Smoking and Health, told the same radio show that increasing tobacco tax is effective in motivating smokers to quit – and preventing young people from picking up the habit.

The council has urged the government to raise the tax to 100 per cent, which would bring the price of an average packet of cigarettes to HK$84.

Responding to Liu, she said newspaper vendors’ businesses may have also been affected by the increased number of free newspapers and convenience stores.

Lau argued the government should pump some of the cash raised from the tax into educating the public about the dangers of smoking and promoting campaigns which help smokers quit. The numbers for quitting ‘hotlines’, where smokers can call to receive encouragement and advice on ditching the habit, could be printed on cigarette packs and their hours extended outside office hours, she suggested.

Illicit cigarettes will exist as long as there is a tobacco tax and the government should enhance prosecution of such cases, Lau said.

The coalition’s Liu expects about 100 of the 400 remaining newspaper stalls to close if the government goes ahead with the tax increase, as sales in newspapers and magazines have already been difficult.