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Industry Responses To The Tobacco Excise Tax Increases In South Africa

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  • Corné Van Walbeek

Abstract

The cigarette manufacturing market in South Africa is highly concentrated, with one company controlling more than 90 per cent of the market. In this paper the retail price of cigarettes is divided into three components: excise tax, sales tax and industry price. After decreasing during the 1970s and 1980s, the real industry price increased substantially during the 1990s. This coincided with sharp increases in the excise tax. The amplified increase in the real retail price of cigarettes decreased aggregate cigarette consumption by about a third. Despite this sharp decline, the cigarette industry substantially enhanced its revenues during the 1990s. However, since 2000 real industry price increases have been comparatively modest.

Suggested Citation

  • Corné Van Walbeek, 2006. "Industry Responses To The Tobacco Excise Tax Increases In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 74(1), pages 110-122, March.
    • Handle: RePEc:bla:sajeco:v:74:y:2006:i:1:p:110-122
    DOI: 10.1111/j.1813-6982.2006.00051.x
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    Cited by:

    1. Steven F. Koch & Gauthier Tshiswaka-Kashalala, 2008. "Tobacco Substitution and the Poor," Working Papers 200832, University of Pretoria, Department of Economics.
    2. Craig Lemboe & Philip Black, 2012. "Cigarettes taxes and smuggling in South Africa: Causes and Consequences," Working Papers 09/2012, Stellenbosch University, Department of Economics.
    3. Yuvaraj Krishnamoorthy & Marie Gilbert Majella & Sharan Murali, 2020. "Impact of tobacco industry pricing and marketing strategy on brand choice, loyalty and cessation in global south countries: a systematic review," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 65(7), pages 1057-1066, September.

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