Following a request from the Economic Development Department (EDD) CICRA (the Channel Islands Competition and Regulatory Authorities) has reviewed the level of pricing, costs and profit of tobacco products in Jersey.
CICRA has identified contributing factors towards the price difference of tobacco compared with the UK and Guernsey.
The EDD requested the market study into the supply and sale of tobacco in Jersey following concerns that the pre-tax products (i.e. when VAT/GST, impôts/duties) were significantly higher in Jersey than in the UK and that there was alleged profiteering by parties involved in the supply of tobacco products in Jersey.
Cigarettes sold in the duty-paid market in Jersey are roughly 90 pence (or around 55%) per pack more expensive than the UK and close to seven pence more than Guernsey in the duty paid market. This equates to Jersey consumers spending almost £4 million extra on cigarettes a year than in UK.
The vast majority of tobacco products supplied in the duty-paid market in Jersey are imported by just two companies under exclusive agreements with the manufacturers. Large retailers in the UK usually source directly from the manufacturer.
CICRA interim chief executive, Michael Byrne, said the biggest contributing factors to the high cost of tobacco in Jersey was impôts/duties, the need for packaging in the Channel Islands to be different from that of the UK (or anywhere else where tobacco is sold), the very small production runs for Channel Islands’ cigarettes which make the price-per-unit higher and the lack of parallel imports (when products are bought from another country where prices are cheaper).
“Leaving aside the public health issues, which are a matter for government, there is a potential need to find remedies to address some of the factors identified in the study,” Mr Byrne said.
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