The rise in prices of cigarettes and alternative nicotine products!
The government in Austria is planning a significant increase in taxes on nicotine products as part of its efforts to close the budget deficit.
The Ministry of Finance confirmed to the newspaper "Heute" that a new tax will be imposed on alternative tobacco products such as nicotine pouches and e-liquids, and this tax alone is expected to generate around 85 million euros next year.
In addition, the current tax on tobacco will be raised, which will add another 100 million euros to the state treasury. The Ministry of Finance defends this step as a "risk-based consumption tax," indicating that it is not only a financial measure but also a health measure, as the increase in prices is expected to reduce consumption.
But the tobacco industry sees things differently. Ralph-Wolfgang Lüther from JTI Austria described the plan as "absolute madness," warning that the state is seeking to collect nearly 200 million euros more annually in taxes on traditional and alternative tobacco products. He pointed out that previous increases have usually not exceeded 35 to 40 million euros annually, while the government is now talking about 185 million in 2026 and 200 million in 2027.
Luthert added that it is still unclear how much cigarette and alternative product prices will rise, but if the budget plan is implemented as intended, it will likely lead to unprecedented price increases.
Meanwhile, tobacco companies continue to raise prices. On May 19, British American Tobacco will raise prices for the second time this year by 10 cents per pack for HB, Lucky Strike, Pall Mall, Parisienne, and Vogue brands. The company had raised prices in March by 20 to 30 cents per pack.
But the only "reassuring" news, according to observers, is that this increase does not yet include the new planned tax that may be added later.
In this context, Wolfgang Straisnig, the head of the tobacco sellers' union, warned that the additional price increase could drive many smokers to buy cigarettes or tobacco heating devices from abroad. He explained that this behavior would lead to a decrease in expected tax revenues, as consumption taxes are not imposed on foreign purchases.