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Abu Dhabi, UAEFriday 21 September 2018

Smokers bulk buying cigarettes ahead of ‘sin tax’ coming into force

Stores across Abu Dhabi had few Marlboro or Davidoff cigarettes available on Saturday and the ones that had were rationing customers to one pack per person ahead of the price hike on Sunday

Cigarettes were selling fast across Abu Dhabi ahead of the 'sin tax' coming into force on Sunday. Pawan Singh / The National
Cigarettes were selling fast across Abu Dhabi ahead of the 'sin tax' coming into force on Sunday. Pawan Singh / The National

With hours to go before a new federal tax took effect, doubling the price of cigarettes and caffeinated drinks, customers were stockpiling their favourite brands, prompting some neighbourhood baqalas, grocery stores and smoke shops to enforce sales limits on best-selling products.

Throughout the capital, display shelves typically stocked full with packets of Marlboros, Davidoffs and other imported cigarette brands popular in the UAE were bare or near empty on Saturday as customers demanded bulk purchases in advance of the price hike, which comes into effect on Sunday.

“Before, this was full,” a saleswoman at an Allday Minimart in the capital said, pointing to the depleted shelves behind the sales counter. “They were buying five to 10 boxes. For example, Marlboro, it costs Dh102 per box, and they buy three to four, like that. Marlboro, Davidoff, Parliament, Dunhill – all.”

The scene played out across half a dozen baqalas and grocery shops visited by The National across the city.

“There is no more stock, ma’am, the stock is finished,” said Shihab Mohammed, a sales clerk at the National Trading and Developing Establishment Smokers Centre.

For the past one to two weeks, customers have been buying multiple 10-pack boxes of bestselling brands, he said. “They were buying last week, like five boxes.”

But over the weekend, Mr Mohammed said he was ordered by his boss to not sell more than one packet of smokes per customer. Other store clerks said they, too, had to restrict the number of cigarette packs sold to individuals.

On Saturday, one 10-pack box of Marlboros, for example, cost Dh95 at the Smokers Centre and many baqalas, while one pack was being sold for Dh10. But starting on Sunday, the price will double as the new excise duty, dubbed the federal “sin tax,” is applied to the price of tobacco products and energy drinks, while sugary soft drinks will be subject to a 50 per cent increase in taxes.

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Read more:

Cigar traders fear new tax rules could price them out of business

Cigarettes and energy drinks to double in price on October 1

UAE supermarkets run out of stock ahead of excise tax

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When the law on excise taxes was published in August, the country’s leaders said it was meant to diversify the Government’s revenue streams and strengthen the economy while discouraging the consumption of products that harmed the environment and public health. The UAE is the second country in the Arabian Gulf to introduce excise taxes after Saudi Arabia, which began taxing soft drinks, energy drinks and tobacco products at the same rate earlier this year.

Kareem HD, a 30-year-old Tunisian, said he was unable to find a single pack of Marlboro Gold or Red anywhere on Saturday.

“Actually, I think they are hiding it,” said Mr HD, echoing the theory shared by a number of other customers. “Really, honestly, because it’s not only one shop. It’s maybe all of them, if you are asking for Marlboro.”

After settling for a packet of Camel Blue, Mr HD said he didn’t think that doubling the price of cigarettes would persuade him to quit smoking for good, but that the move was “really bad” for his wallet.

“Even if it becomes Dh20 or Dh30, I will stay smoking,” said Mr HD. “I will quit a bit, but I will not stop it.”

Dubai resident Ihab Ahmed said he'd attempted to buy some cigarettes to stash in his home in Silicon Oasis. However, he said the cigarette shelves were "barely filled with anything", and the petrol stations were also running low on stock.

"I thought I'd stash too, so asked if they have full packs. There are like no packs, all sold.

"There were a couple of stores - two medium to large ones where their shelves were half empty and one didn't have my brand and neither had carton packs."

Social media users reported calling their local supermarkets, only to be told they're all out of cigarettes.

Customers weren’t out in force displaying the same desperation to hoard large quantities of energy or soft drinks as they were for cigarettes, a manager at a local Lulu Express said.

“With cigarettes, we are running out of quantity, but nobody is going to stock too much Red Bull,” he said.

But at least one consumer was seen piling his cart full of fizzy drinks.

Ahmed, 36, said every month he visited the grocery store to stock up on his favourite drink, Red Bull, and soda for his family, so the bulk purchase wasn’t necessarily driven by the impending tax.

“When I buy, it’s in bulk because I don’t have time to buy every day or like this,” said Ahmed, who asked that his full name not be used. “I think it [the excise duty] is good for the country, of course, but for the people it is not good.”

He did say that the price hike may persuade him to cut down though.

“Maybe, it will make me stop,” said Ahmed.

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