Cigar industry warns of tax increase and price explosion

Dortmund/Bünde. Anyone who buys cigars or cigarillos may have to pay significantly more from January than before. If a project by the coalition factions in the Bundestag were implemented, significantly more taxes would be incurred, said the managing director of the Federal Association of the Cigar Industry, Bodo Mehrlein, to the dpa at the Intertabac trade fair in Dortmund. “It would be a tax explosion, which would increase prices by 50 to 60 percent.”

This threatened the industry with severe losses. “If an exemplary cigar now costs 10 euros, it would then perhaps be 16 euros - that's so much more money that some consumers might hold back and not buy one.”

Such a setback would hit the industry particularly hard, as it is already struggling with weak demand. “We are feeling the bad economic situation; sales in the German cigar industry this year are likely to be six to seven percent lower than last year.”

Because of high gas prices at the pump and other increased everyday costs, consumers are paying more attention to the price. “You save somewhere - and that's the pack of cigarillos or the good cigar that people don't buy.”

According to association information, there are seven companies in Germany that produce cigars, four of which are in Bünde and one in Minden-Lübbecke (NRW). There are also 15 importers who sell goods from abroad in Germany. According to the association, the industry has a total of 1,640 employees. The tobacco in the cigars and cigarillos produced in this country largely comes from Latin America and Indonesia.

According to information, around two billion cigarillos and cigars are sold in Germany every year. The two products fall into the same tax category, so there is no distinction from a government perspective.

“If the coalition does not significantly weaken its plan, it would hit us hard: the loss of jobs would probably be unavoidable,” says Mehrlein, emphasizing that the products in his industry are not purely luxury goods. “We not only stand for high-end cigars for more than 100 euros, but also for good middle-class goods: our customers are not just the rich, but also the little man who likes to smoke his cigarillo in the allotment garden.”

The association representative is also concerned about the 500 specialist retailers who sell cigars and cigarillos in Germany. “At some point the tipping point is reached in terms of prices: the goods become so expensive that demand collapses rapidly and our industry is dragged down.”