Cigarette Makers Set to Hike Prices

German smokers who don't want to kick the habit are going to have to dig deeper into their pockets to continue paying for their pleasure. The association of the cigarette industry, the VdC announced in Germany's Frankfurter Allgemeine on Sunday their intentions to raise the price of a packet of cigarettes by €1.30, to a total of €4.50. The association said that although they actually only needed to put the price up by €1.00, they were going to increase by a further €0.30 because the last three tax increases had not fully reached consumers. One third of the additional price hike goes directly to the cigarette retailer, and two thirds back to the industry. The German government is planning to plough the money gained from an increase in tobacco tax, to be introduced in three phases from January 2004, into the health service.