The past couple of months have been rather difficult for Indian cigarette companies after the government raised GST on cigarettes from 28% to 40% in February, leading to a sharp rise in cigarette prices. The rise in prices were identical across products sold by ITC and Godfrey Phillips.
Both these counters are in focus today following an Informist report that suggest cigarette sales have fallen up to 5% in March and is down further in April. This is a direct impact of the GST hike that forced these companies to pass the additional charges to the customers.
As a result, prices of several cigarette variants have increased, with ITC's Mini King size cigarettes seeing the worst sales volume de-growth during the period of March to April. The report adds that cigarette sakes have plummetted the most in East India, where ITC notably hails from.
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The price hikes have resulted in cigarette packs that previously used to retail at around Rs 170 go up to Rs 240, whereas many low-cost cigarettes packs have gone from Rs 80 to Rs 120.
Premium cigarettes have attracted bigger hikes, which is why a 20-pack of cigarettes of popular brands such as Gold Flake Milds, Classic Ice Burst and Marlboro Fuse Beyond have gone from Rs 340 to Rs 480.
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