Crisis intended to save us

Tobacco crisis

It’s been already a silent ritual for quite long. I would give a greeting nod to a young vendor at the kiosk and hand him three bills, he would nod in response, take the bills and pass me a narrow blue pack of cigarettes. Whereas today, the usual course of things has been disturbed. Having handed me cigarettes, the kiosk vendor told me in a conspiratorial manner: ‘Yours will soon go up in price too.’

What an unpleasant news, though quite expected. Before that, there was already a hike in prices on certain brands of cigarettes-they’ve become 20-30 kopeks more expensive, which is the Azerbaijani market’s traditional response to yet another rise in US dollar rate. And now, apparently, my Davidoff’s turn has come.

The kiosk vendor was right. Already the next day, the same pack of cigarettes was sold for AZN3,30, instead of AZN3. And it’s not the first time that tobacco products are increasing in prices in Azerbaijan. Cigarettes have became twice or even more expensive over the past year. That same Davidoff cigarettes cost AZN 1,5 in early 2015 and they were regarded as rather costly at the time. Whereas now, AZN1,5 is a price of the cheapest smoke, to which some have switched after they no longer could afford buying their usual cigarettes. A new ‘splurge’ criterion has been even introduced in pubic- stand one’s ground following all those perturbations and keep smoking ‘one’s own’.

Smokers don’t give up

Healthy lifestyle proponents believe that expensiveness may well provoke complete quitting of smoking. However, our survey has proved that this this unlikely to happen.

For example, Tatyana Kovaleva claims, she’s not going quit, even if prices hike once again.

‘I smoke about one pack a day. After all, it’s not that big sum. I’d rather stop buying paper towels or sausage, than quit smoking,’ says Tatyana.

Kyamran Agabekov also shares her opinion:

“The cigarettes I smoke have become twice expensive, but I keep smoking them and I’m not going to quit. I don’t think that high prices can urge someone, including me, to stop smoking. If worse comes to worst and I could no longer afford the cigarettes I’m accustomed to, I’ll find something more affordable to substitute them or will switch to roll-your-own cigarettes.”

However, some people gave up on their habits for the sake of economizing. Mustafa and Valida Zakirov, the husband and wife, admit that increase in tobacco prices has seriously affected their family budget. Earlier they had spent on cigarettes AZN 70 per month and thought it was quite a lot, whereas not this sum totals about AZN100.

“After the first price hike we started smoking cheaper cigarettes. But now they have also become expensive. So, that trick won’t work, because everything that is cheaper than AZN2, for my liking, is just a toxin. It would be regrettable to poison one’s lungs with it. If price growth continues, I will resort to extreme measures and switch to the cheapest cigarettes; I will smoke them through a mouthpiece to minimize harm,” Mustafa shares his plans to overcome the ‘tobacco crisis’.

As for his wife, in her view, price increase on cigarettes, as well as on everything else, just encourages smoking.

“When I’m nervous about all those devaluations etc., then I’m smoking more than usual. And I’m not the only one,” says Valida. “For many people in Azerbaijan smoking is a kind of means to relieve stress, a certain solace from the twists and turns of life. Consequently, the more the stress, the more people smoke. And even a double increase in cigarette prices could hardly make them give up on cigarettes. Generally speaking, it seems to me that those who are better off, whose life is more calm and stable, are more inclined to quit smoking. They don’t feel that acute need for smoking. In addition, they have more ‘graces in life’ that the underprivileged layers.”

Each smoker has already found an anti-crisis strategy for himself/herself: to buy cigarettes in Tbilisi, where they are less expensive and in greater variety; to smoke tobacco, to smoke inexpensive brands. But none of them have said: ‘Yes, it’s expensive and therefore I’ll quit smoking.’

According to the data provided by the Sustainable Development Research Center, the number of smokers in Azerbaijan has considerably increased over the past few years. However, it’s hard to determine the precise number of smokers, since it could be estimated only by the number of sold cigarettes.
At the same time, if earlier the majority of smokers were adult males, now more and more women, adolescents and even children under 13, are joining the smokers’ ranks.

Smokers win

Some time passed and it turned out that the smokers’ mass switch to more cost-effective options had flattened the cigarette manufacturers and vendors’ pockets so much, that they backtracked. In mid-December, the prices on tobacco that cost more than AZN2, suddenly dropped by 15% on average, and that’s against the background of skyrocketed US dollar rate and the overall price hike.

According to the traders, a sudden drop in prices is conditioned by two factors. First of all, many have switched to cheaper cigarettes, and thus, the demand for expensive ones has considerably dropped. And secondly, the volume of competitive smuggled cigarettes has been increasing at the local market. In other words, the Swiss Marlboro is not that much expensive than its counterpart with the Azerbaijani excise stamp, whereas the quality of the ‘Swiss’ is better.

Toghrul Mashalli, an economist, has confirmed the traders’ words, adding that Azerbaijan mostly imports cigarettes from Russia and Ukraine. A pack of cigarettes imported from Russia costs about US$0,54 on average, and that imported from Ukraine – US$0,38. If we add excise taxes and other payments, this figure will increase by approximately 20-30%.

“Simply put, increase in cigarette prices is of speculative nature. Prime cost of most of them is much lower than the given price, especially given a considerable amount of smuggled cigarettes,” Mashalli summarized.

Thus, smokers can now celebrate a victory over greedy traders, having urged them to lower the prices closer to the prime cost.

• WHO believes that smoking causes nearly 6million deaths around the world per year and that nicotine dependence is second only to alcohol addiction as to its strength;
• Smoking in public places is not prohibited in Azerbaijan;
• When one of the MPs suggested banning it, the issue was never brought before the Parliament for discussion;
• It is prohibited to sell cigarettes to minors under the age of 18;
• Cigarettes are cheaper in Azerbaijan than in Europe and Turkey, where high taxes in this case are part of anti-tobacco policy.