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Abu Dhabi, UAEWednesday 20 June 2018

High prices and low stocks hit UAE's ardent smokers

Low earners in particular are priced out of the market

Various brands of cigarettes sit on display, all featuring a graphic image meant to deter smokers, in a small corner store in Abu Dhabi. Silvia Razgova/The National
Various brands of cigarettes sit on display, all featuring a graphic image meant to deter smokers, in a small corner store in Abu Dhabi. Silvia Razgova/The National

On Saturday the tills of baqalas and tobacco kiosks rang constant as smokers bought packs by the hundreds.

On Sunday they were silent.

The doubling of prices under the new excise tax that came into affect on October 1 looked to have the intended affect, despite the predictable rush to stock up the day before.

In Abu Dhabi yesterday, many shoppers appeared to be put off by the new prices, with stores reporting a fraction of their usual trade in tobacco. Energy drinks were also hit with the 100 per cent, and fizzy drinks by a 50 per cent hike.

Those on good salaries are likely to see the hike as negligible, but for many the Dh3.50 to Dh7 hike on low end packets, and the jump from Dh11 to Dh22 for some premium brands, is likely to be too much.

Select baqalas and hypermarkets have applied the prices but those with old stock have kept prices low.

Whatever the price, shoppers will find slim pickings. Shelves at half a dozen baqalas and supermarkets visited by The National were nearly empty. Retailers said the shortage was from a lack of supply by distributors.

Customers caught out by the new tax walked away empty handed.

At the smokers centre in Carrefour at Marina Mall, clerk Rhodora Breganza had seen five surprised customers walk away by early afternoon after seeing the new prices. “It’s been effective so far,” she said.

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Read more:

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

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Hundred per cent tax on cigarettes and energy drinks 'should be the first step towards a healthier nation', doctors say

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One customer, a Nepalese construction worker, pulled a five dirham note from his pocket as an afterthought after buying his lunch.

Ms Breganza shook her head. “New prices” she said. “It’s seven dirhams.”

Two dirhams short, he left empty handed.

Abdul Razak, a clerk at the Mohammed Tahir Baqala off Hamdan Street, had been given a six-page list of amended prices to be implemented immediately. On Saturday, the day before the tax was implemented, he had sold 60 packs. By mid-afternoon on Sunday, he had sold just three.

“People here smoke a lot,” he said.

"Look, in the 15 years I’ve worked here how many cigarettes have I sold? A lot. But from today you’ll see a change. People won’t want them anymore.”

At the neighbouring Ridwana Baqala, new price tags had been stuck to the shelves but prices were unchanged. It made little difference. Shelves were almost empty because their supplier had not come for a week.

“They’ve only given us limited stock for the last month,” said the clerk Mohammed Kadbu.

Larger retails reported similar issues.

“We have not raised prices yet because what we have is the old stock,” said Sayyid Minhas, the purchasing manager at Everfresh Hypermarket.

“Once we have a circular we will increase the price but not beforehand. Then again, we don’t have much stock because the main cigarette supplier has not given us anything.”

He expected a decrease in sales.

“It’s the first time we have something like this in the UAE so we have no idea what it will be like,” he said.

Shisha prices are expected to increase significantly at low end cafes in Khalidiya. Upmarket cafes may absorb the extra cost.

“You have to care about the customer,” said Ahmed Taha, the owner of Cafe De La Paix, at Marina Mall. “In shisha, at the end of the day, you’re making money. You don’t lose. If you make 50 per cent profit then take 25 or 10 per cent. Don’t be greedy.”

Taxi driver Noor Hossain said he would not buy another packet after the prices increased.

“No I will not, because my salary is how much?” said Mr Hossain. “Every day, I have 100 dirham and with that money I need to buy breakfast, lunch and dinner. All this costs Dh50 or Dh60. So now I will stop cigarettes. I promise you, today or tomorrow, I will stop. I will not buy another pack. Maybe at first it will be a little problem for me and I will need tea for energy but I’m thinking this is good. It’s better if everybody stops.”

Not everyone was optimistic. “It won’t work,” said Golam Murtaza Goli, an Iranian clerk who has worked at his brother’s baqala for 39 years. “They say they’ll stop but they won’t be able to quit.”