Health Officials Welcome Higher Tobacco Prices

Health officials have welcomed the enhanced tax on tobacco products which last weekend culminated in the price increase of most low-end cigarettes but left premium Classic brands untouched.

Deputy director of Medical Services William Maina also said the move to fund cancer screening equipment in the Budget would be a positive spin-off in the government policy.

The World Health Organisation (WHO) has been pushing governments globally and in recent months held seminars for African tax and treasuries officials in Nairobi to push its case. The Business Daily exclusively reported the health agency’s manoeuvres which culminated in the Wednesday Budget announcement.

Sportsman — Kenya’s most popular brand manufactured by multinational British America Tobacco (BAT) — went up by the largest margin of Sh20 a packet and will now retail at Sh90; meaning it will cost Sh4.50 a stick.

Direct competitor, Supermatch manufactured by Mastermind Tobacco (MMT), rises Sh10 to Sh80 for a packet of 20. “The increased tax is what we have always asked for. We wanted tax to go up and result in actual price increases so as to prevent smokers from shifting brands,” said Dr Maina.

Other BAT products that went up include Safari Kings by Sh8 to Sh78 while Safari Regular and Rosters went up Sh10 to Sh60.

MMT increased the price of its price by Sh10 to Sh70 for Ralli and Sh50 for Rocket brands. The price increases by the duopolists makes it more expensive for low-income smokers especially. The government is seeking an additional Sh10 billion excise tax from tobacco, beer and wines.

On Wednesday, Finance minister Uhuru Kenyatta put the tobacco excise at a fixed Sh1,200 per mille (1,000) or 35 per cent. This eliminated the traditional four bands where firms would reduce prices to fall under a lower-taxed bracket.

On top, it left the premium brands by BAT at a lower tax bracket as some of them were in the maximum category of 2,000. Dunhill as well as Embassy remain at Sh140 and SM at Sh90. Mr Kenyatta implemented a similar single-tax model for beer products which is expected to result in massive increase in the price of non-malt beer.