As of March 1, German smokers have to dig deeper into their pockets as the price of cigarettes has gone up sharply, with a pack of 19 now costing up to €3.60 ($4.48). The tax on cigars, fine-cut tobacco and pipe tobacco has also been increased. It is the first of a three-stage increase in tobacco taxes, an increase of 1.2 cents per cigarette. The additional income from the tax increase will go towards financing health insurance benefits. However, the size of the price increase is not wholly due to the tax hike alone. According to a spokesman of the cigarette firm Reemtsma, manufacturers did not pass all the additional costs from tabacco tax increases in 2002 and 2003 along to customers. The rise in prices is overdue, he said.