Smokers say they are stockpiling cigarettes, which result in a shortage of major brands. - File photo
Dubai - There are people who have already bought a large quantity of tobacco and stashed them in their homes.
Published: Mon 25 Sep 2017, 11:51 PM
Groceries and smokers have started stockpiling cartons of cigarettes to avoid the new sales tax which will come into effect next month.
The new tax will shoot up the price of tobacco by 100 per cent. Interestingly, customers have find a way out to get rid of this by making advance payment to the groceries to reserve cartons of cigarettes for them.
Khaleej Times visited groceries after finding that smokers are queuing up to pile up cigarette packets, as much as they can, before the prices go up on October 1.
There are people who have already bought a large quantity of tobacco and stashed them in their homes. Some others visit groceries and sales outlets at petrol stations to collect as much as they can. The growing demand from customers is compelling the groceries to make up front payment as they are facing problems with the cigarette distributors and supermarkets.
According to groceries, they get only a limited number of cigarette cartons from the distributors now and are struggling to meet increasing needs from their tobacco clients. The grocery owners told Khaleej Times this made them ask their regular customers to pay in advance and collect their cigarette packets a few days later.
Meanwhile, the suppliers are also limiting the number of cartons they reserve for groceries. This resulted in shortage of cigarettes in groceries who say they are unable to meet the needs of their regular customers.
One seller said: "Cigarette can be kept at home intact at room temperature as they neither have to be kept in a cool environment, nor have an expiry date. So, if you stack up now, the cigarette budget will not be affected for several months."
Some other people surveyed by Khaleej Times shared apprehensions over price hike of carbonated drinks sold at restaurants, fast food chains and cinemas. Residents are eager to know how the taxes will be applied on their items so that they can set priorities for their purchases.
Excise tax from October 1
On October 1, the excise tax will go into effect at a rate of 100 per cent on tobacco and energy drinks that include stimulants or substances that induce mental or physical stimulation, such as caffeine, taurine, ginseng and gaurana. The tax also will go into effect on soft drinks, at a rate of 50 per cent.
The new law mandates that businesses must be registered via the Federal Tax Authority's interactive website.
Retailers say no extra stock
When Khaleej Times reached out to several small minimarts to find out if they have been ordering extra stocks of cigarettes, all said no. But they have been witnessing higher customer demand.
"We're continuing to order only normal quantities of cigarettes, but we have witnessed some customers buying in bulk loads," an assistant manager of a Motor City-based mart said. "Because we only sell at a retail level, we don't have the means to sell in huge amounts, but our suppliers do not have enough to fulfil large orders anyway. "
A second retailer, which has several markets across the city, said they have seen a surge in sales for Marlboro Red and Gold, but other than that, cigarettes have been selling "as normal" in their Marina-based branch. "When something like this new tax rule comes into effect, you have to expect a change in sales trends. As such we have not ordered anything extra."
What do residents have to say?
I bought entire stock of my brand
"I smoke about two to three packets of cigarettes a day. When the prices increase, I'll be paying out about Dh75 a day on cigarettes alone. So yes, I've been stockpiling in advance. I went to a supermarket the other day and bought all the supply they had of the brand I smoke. I don't agree with the increase though. "
AbdulRahman Al Zarooni, Emirati
New tax will hit me hard
"Yes, I will be, and have been, stocking up on cigarettes. The new tobacco tax is going to hit me hard because I am a heavy smoker. I smoke a minimum of three packets a day, so while I can save on money (by stockpiling) I will. I already have a couple of hundred cigarettes in my house."
Anthony William, Irish
I will start buying from Duty Free
"I normally don't smoke that much. I usually finish 20 cigarettes every two days, so I won't be trying to stock up too much. But before the October 1 rule comes into effect, I will buy a few extra packets. I think from now on what I will do is mainly purchase my cigarettes from Duty Free as they won't be hit with the tax."
Sudipto Bhowmik, Indian
I welcome tax, it will cut down my habit
"I haven't been bulk buying but I can see why some people have been, especially heavy smokers. When the announcement was made, my initial reaction was 'wow'. Doubling the price is a lot. But at the same time I will use it as an incentive to cut down my habit. Now I smoke about 20 a day, but I might move over to the e-cigarettes now."
Debojit Bose, Indian
reporters@khaleejtimes.com
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