Retailers hoarding cigarettes ahead of duty hike

Manama : Retailers are hoarding cigarettes in anticipation of a duty hike, leading to a sudden drought of the product in the local market. 

According to officials, shops are storing but refraining from selling cigarettes to the public as the country is bracing for imposing taxes on tobacco products as well as energy and carbonated drinks.

Once imposed, the taxes will double cigarette prices in the market with an average of BD2 per pack, according to a recent study by the Financial and Economic Affairs Committee in the House of Representatives.

As the implementation of the new duty nears, cigarette stock has been decreasing in local shops, with some brands actually disappearing from markets’ shelves.

It was officially confirmed yesterday that some vendors are refraining from selling the cigarettes, with the aim to make  a few quick bucks once the duty is imposed, cashing in on the  lower prices they bought their stocks (average of BD1).

Consumer Protection Directorate in Industry, Commerce and Tourism Ministry yesterday announced that it has seized “21 stores that have been proven to store and refrain from selling cigarettes to the public” and took the required legal and administrative procedures against, and referred their owners to the Public Prosecution.

“This action comes in the context of the directorate’s legal obligation to prevent monopoly and collusion in accordance with the Consumer Protection Law 35 of 2012 and in particular Chapter 4 concerning competition and monopoly controls and violations,” a statement issued yesterday by the directorate mentioned.

 “Storing any product or refraining from selling it, attempting to exploit any emergency or exceptional circumstances will be legally addressed, in order to prevent such practices that may extend to any strategic commodity. Such behaviours will not be tolerated,” the directorate has stressed in its statement.

DT News reported last week that the country is one step away from imposing its first taxes, as both branches of the Legislative Authority approved a bill to join the unified GCC agreement on selective taxation.

The bill introduces 100 percent taxes on tobacco products and energy drinks, and a 50 percent tax on soft drinks.

It was passed on October 12 to the Government, which is expected to refer it to His Majesty the King for final ratification as a new law in the next few weeks.