CHENNAI: The Union Budget that was recently delivered by Finance Minister Pranab Mukherjee made cigarettes and other tobacco products more expensive. But there is a different kind of equation that is working out at the ground level. Wholesalers of tobacco products have started hoarding the goods and are making a killing, selling cigarettes at steeply increased rates.Shopkeepers as well as wholesalers in the cigarette business say it is regular practice for cigarette manufacturers to stop supply a couple of weeks before an expected rise in prices. And it also take months on end to come out with packets printed with the updated MRP.This practice gives ample opportunity to wholesalers and retailers to fleece customers. “We usually have a margin of around `2 or `3 for every packet of 10 cigarettes we sell,” claimed a shopkeeper in Adyar, even as others claimed the margin was higher.“Once the supply stops, we have to buy from wholesalers at increased prices. We then round it up to the nearest 10 and sell it. For instance, a pack of 10 cigarettes which is `55 is sold by wholesalers for around `66. They pocket a whopping `11 or `12 extra,” added the shopkeeper.There is even a sort of ‘caste system’ to what prices cigarettes are sold to retailers, as one wholesaler told this reporter. “If we sell a pack for `70 in the southern and central parts of the city, we sell it for around `65 in the north. We also sell it at higher rates to places with offices removed from market places. People who can afford the higher prices don’t mind paying,” says Selvam (name changed), a cigarette and gutkha wholesaler who operates in Nungambakkam and T Nagar.There are some wholesalers who say they avoid this sort of opportunism. But when everyone involved is making a killing, there is little chance many would let the opportunity go. “I continued to sell at my usual margins. But the shopkeepers know what prices their competitors sell the products and they toomake a quick buck,” says Nagendran, a supplier in Ashok Nagar.Apart from the hiked prices, the short supply of cigarettes man-ifests itself itself in other fo-rms. “We are finding it difficult to get cigarettes. That’s why we don’t sell whole packs. We need to have cigarettes in loose, to sell it to customers who come here to have tea,” said Murugesan, a tea shop manager in Saidapet.While activists and anti-tobacco campaigners call for heavy taxation on tobacco products, and with the Union Health Ministry writing to State governments to increase VAT, even smokers willing to face the consequences and ready to foot the bill find it an uphill task to buy their cigarettes.
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