The United Kingdom’s new autumn budget will bring a bit of a price increase to cigar smokers the next time they fill up their humidors; as of 6 pm on Nov. 22, the tobacco tax went up by 4.9 percent.
In the U.K., tobacco taxes are tied to the annual rate of inflation, with the tax on cigarettes and cigars increased by two percent over the inflation rate, while rolling tobacco adds on another percentage point increased at three percent over inflation. With the current inflation rate at 2.9 percent, that means a 4.9 percent increase for cigars and cigarettes, and 5.9 percent for rolling tobacco.
The increase won’t be immediately felt, as it is generally rolled into an overall increase from the distributor that takes into account manufacturers’ increases, exchange rates, taxes, and other factors. In terms of breaking it down to a single cigar level, the tax increase on cigars goes up by £11.52 per kilo, which would make the effect on a robusto vitola in the neighborhood of 13.4p, according to According to Mitchell Orchant of C.Gars Ltd.
It’s the second tobacco tax increase that U.K. smokers have faced in the past 12 months, with the first one applied in May. Chancellor Philip Hammond implemented a new autumn budget based on changing revenue forecasts, passing along the tobacco tax increase along with an increase on what is referred to as white cider, while holding the tax rates on traditional cider, beer, wine, and spirits, as well as petrol and diesel fuel.