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Ministers respond to review of tobacco prices

16 April 2014

The Economic Development and Treasury and Resources Ministers have welcomed the publication of a market study by the Channel Islands Competition and Regulatory Authorities (CICRA), which compares the price of cigarettes and tobacco in Jersey with prices in the UK and Guernsey.
The study, which was re quested by both Ministers, reveals that when deducting tax and duty, cigarettes in Jersey are on average 89p per pack more expensive than in the UK, and 6.8p per pack more expensive than in Guernsey. 
The report estimates that 3.9 million packs of cigarettes are sold in Jersey annually, which means that consumers are paying approximately £3.4 million more here than they would pay in the UK.
The report lists the potential explanations given for the differences in price. These include the cost of producing unique packaging for the Channel Islands, the existence of exclusive supplier arrangements and the inability to source cigarettes from other jurisdictions.

Enhancing competition

The report recommends a number of steps that could be considered to enhance competition.
In welcoming the report, Economic Development Minister, Senator Alan Maclean, said “This market study highlights another example of a market that is not functioning effectively and is not fully open and competitive. As a result Islanders appear to be paying much higher consumer prices for tobacco products. This report follows a number of market studies which are fundamental to understanding the real cost of living for Islanders and will assist Government in developing policies that aim to deliver fairer prices.”
The Treasury and Resources Minister, Senator Philip Ozouf, said “It is good to see a detailed analysis appearing to confirm what we have said for a number of years during the annual Budget debates – that it is difficult to understand why prices here compared with the UK are so high. The aim has to be to ensure that we have competitive markets where possible and that duties can raise the appropriate revenue to help fund the costs of the harmful health effects of smoking.”
Both Ministers have committed to considering the recommendations of this report and will work to put in place a plan of action as soon as possible.
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