Bad/good news for smokers: Tobacco prices slightly rise in Armenia in 2013

Bad/good news for smokers: Tobacco prices slightly rise in Armenia in 2013

NAZIK ARMENAKYAN
ArmeniaNow

An increase in tobacco prices at the beginning of the year has been met with discontent by many smokers in Armenia as it comes as an additional cost for most of them surviving on meager incomes. As a silver lining, however, experts believe that even this slight increase (about 7 percent) may help reduce the rate of smoking in the country.

Price rises have been reported for both imported and locally produced tobacco products as the government has raised excise taxes.

Now some smokers in Armenia (where more than half of the adult male population smokes) are facing a hard choice – to kick the bad habit or continue puffing at a higher cost. A moderate choice for many, however, is to reduce the daily intake of nicotine not to spend more money than they normally do.

Armen Mkrtchyan, a 49-year-old resident of Echmiadzin, says that he usually smokes local cigarettes, a pack of which had cost him 300 drams (approximately 80 cents). Now its price has been increased by 20 drams (some 5 cents).

“Sometimes I smoke up to two packs a day and my son smokes a pack of cigarettes that are sold at a price of 400 drams (about one dollar). That is, every day we have to spend about 1,000 drams (some $2.50) from our family budget only for cigarettes, which adds up to 30,000 drams (about $70) a month,” says Mkrtchyan, adding that even this slight increase in the price of cigarettes puts a strain on the family’s budget. (Mkrtchyan, who is engaged in seasonal work in construction, says he earns about $500 a month when he has work, but often has to stay out of work due to limited job offers).

Some smokers, especially those smoking several packs a day, have started to think about giving up smoking, but kicking this habit appears hard for heavy smokers who have developed strong dependence on nicotine.

Albert Arakelyan, a 51-year-old resident of Yerevan, smokes a pack of cigarettes a day, paying 270 drams for his habit day in and day out. Smoking sucks about $20 out of his monthly budget in the end – an appreciable sum of money for a person living off about $250 a month. Arakelyan says he has made up his mind to start gradually reducing the number of cigarettes he smokes as he starts to understand more clearly that smoking is not only a direct waste of money, but is also costly in the long term due to involving health risks.

Experience in other countries, in particular the United States and European Union member nations, shows that along with other measures a rise in tobacco prices normally result in the reduced rate of smoking among the population.

“Tobacco is a well-consumed product, but it is not an essential or staple product. The rise in prices for tobacco may result in the reduction of tobacco consumption. And a timely and correct increase in excises will result in the maintenance of the revenues received by the budget in the form of taxes from tobacco sales and at the same time will promote the reduction in the number of smokers,” says Alexander Bazarchyan, head of the Public Health Department at the Ministry of Health who also coordinates the Ministry’s anti-smoking program.

Many consumers still believe that tobacco prices have been raised by the local producers, such as Grand Tobacco and Masis Tobacco, because of the rise in the prices of raw materials used in the production. But Grand Tobacco company spokesperson Vahram Brutyan denies this.

“Grand Tobacco and Masis Tobacco have raised the prices of their products by an average of 11.5 drams. The two companies produce about 80 varieties of cigarettes, all of which are available on the local market. The prices for some varieties have increased by 7-20 drams, but there are cigarettes whose prices have remained the same,” says Brutyan.

The latest increase in tobacco prices is due to changes made in the Armenian law on the fixed payment for tobacco products back in October 2010. Then the government decided that the fixed payment should be raised by 2014.

The State Revenue Committee’s Information and Public Relations Department told ArmeniaNow that beginning this year tobacco producers have to pay 7,000 drams (about $17.50) for every 1,000 cigarettes they produce - instead of the rate of 6,250 drams (about $16) that was applied before. For a pack of 20 cigarettes it amounts to a rise in the fixed payment rate by 15 drams (from former 140 drams).

The increase also applies to imported tobacco – 8,000 drams (about $20) instead of 7,500 drams (about $18.75) charged for 1,000 imported cigarettes before. Thus, a fixed payment rise for a 20-pack of imported cigarettes makes 10 drams (about 2 cents).

“As a public health professional I would like to see an even higher tax. That would have a stronger impact [on decisions to quit or reduce nicotine smoking]. First, access to tobacco [for nonsmokers] is decreasing, smokers have high motivations to stop smoking or smoke less, and there is also a long-term economic effect as a nonsmoker tends to get ill less frequently, works longer, can stay healthy and pay taxes for a longer period of life, and, therefore, in the long term the economy benefits from the presence of many nonsmokers,” says Bazarchyan.

The expert explains that there are several ways of tobacco control, such as bans on advertisement and smoking in public places, but he considers following particular taxing policies to be the most effective of the instruments available in the anti-smoking fight.

Armenia is considered to be a nation with a high rate of smoking. Some 55 percent of its adult male population smokes. Smoking among women in Armenia is believed to be considerably less spread than among men (at around 5 percent), but many women tend to hide their habit due to social stigma and real figures could be higher. Normally, a smoker starts smoking at the age of 16-21 in Armenia.

“The countries that began combating against smoking late now have large armies of smokers. In the United States smokers made 60-70 percent of the adult population in the 1950s, but they started using legislative means beginning in the 1960s, managing to reduce the rate of smoking considerably in the subsequent decades. Meanwhile, it has only been a decade that such measures have been applied in Armenia,” explains Bazarchyan.

Last year, the American Cancer Society rated Armenia as the third country in the world by the number of deaths (per capita) among men caused by smoking. Some 3,000-4,000 people are believed to die in Armenia annually because of diseases originating through tobacco smoking.

Bazarchyan says smoking-related disease affects about 1,000 men in Armenia annually.

According to the expert, when the rate of smoking is reduced positive trends in the statistics related to these diseases start showing in about 15-20 years – a period in which a smoker usually begins to feel the complications of his or her unhealthy habit.