Tobacco giant says price cuts legal

One of the tobacco giants accused of cutting cigarette prices to make smoking more affordable and entice reformed smokers back to the habit saidthe cuts were legal.

British American Tobacco New Zealand claimed its decision to cut the price of three of its brands by between 50c and $1.10 fell "squarely within the Smokefree Environments Act" and rejected any suggestion that the price cuts were aimed at increasing consumption.

Anti-smoking groups have reacted angrily to the price cut revelations, accusing BATNZ and Imperial Tobacco of undermining efforts to reduce smoking levels by making the habit more affordable.

Imperial has also cut the price of three brands but attempts to speak to a company representative have been met with silence.

Associate Health Minister Tariana Turia has joined the debate, warning both companies that they were "treading a fine line".

She said she had "huge concerns" that the price cuts would make smoking more affordable and has asked the Health Ministry to investigate whether the reductions were legal under the act.

"It is outrageous that on one hand the Government is spending millions of taxpayer money to stop smoking addiction and on the other hand these companies are enticing smokers to consume more."

Feedback from the ministry was expected by the end of this month, she said. "If that report says the tobacco companies are in breach of the act, then I'll have no hesitation in recommending they be taken to court."

BATNZ spokeswoman Susan Jones confirmed a new price list was sent out effective from June 8, but said that was a guideline and "retailers set their own price".

Price lists obtained by The Southland Times reveal BATNZ's customers were notified of price changes on June 5, with Imperial announcing its price changes on June 22.

Attempts to clarify the issue and seek further comment from British American were unsuccessful.

The Quit Group's executive director, Helen Glasgow, said the price reductions indicated that demand for cigarettes had fallen and tobacco companies were trying to entice customers back. "That is the good news," she said.

"It's the first I've heard of cigarette prices going down. It probably means, because of tight times, people are smoking less and thinking more about quitting."

- © Fairfax NZ News