“It’s unlikely that I will reduce smoking,” declares Aritra Roy, a mid-level executive at an IT firm in the city. Roy prefers Goldflake’s Kingsize (an 84 mm stick) available in a pack of 10, priced at ₹95.

While it is unclear by how much exactly their price will increase, according to Budget 2015, a hike of 15 per cent can be expected on excise duty on cigarettes, on sticks measuring 65mm and above. Likewise, an excise duty hike of 25 per cent has been proposed on cigarettes of length less than 65 mm. For Ankur Guha, a new entrant to the job market, repeated duty revision doesn’t bode well. He recently shifted from smoking Silkcut (69 mm currently priced at ₹38 for a pack of 10) to Superstar Goldflake (65 mm sticks priced at ₹ 35 for a pack of 10). Now, he is unsure how the higher tax on sub-65mm sticks will affect his purchase.

Ashutosh Keshri, a cigarette shop owner, says some customers decided to switch between brands — Classic to Filter Wills and so on. While most stuck to the same brand, consumption fell. Others have started buying packs of 20 or 10 instead of single sticks to offset hikes.

Price hike

According to Gaurang Kakkad, Research Analyst,  Religare Capital Markets, this is the fourth successive year which sees an 18 per cent plus hike. “We expect ITC to take 10-12 per cent price hike for the year which would be a clear negative for volumes/EBIT growth,” the brokerage house said.  When contacted, ITC declined to comment.

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