Roll-Ups Burn A Hole in Cigarette Sales

Source from:  www.timesonline.co.uk 10/29/2009

Roll-ups are making a comeback, as recession-hit smokers switch from expensive cigarettes to cheaper hand-rolled tobacco. Customs officials cleared 159,605kg of rolling tobacco for distribution in the first nine months of this year, a 38% increase on 2008. They attributed the surge to a rise in the use of roll-your-own tobacco by smokers striving to cut costs.

A survey published last week found that Irish people are smoking more than ever, with one third of the population still lighting up, the highest rate in 11 years. Despite hikes in tobacco tax, the ban on smoking in the workplace and a law against shops displaying cigarettes for sale, the number of smokers has risen since 2007, when 29% of the population smoked, the EU's Help campaign found. A 25g pack of rolling tobacco costs €8.74 but, according to Vincent Jennings, chief executive of the Convenience Stores and Newsagents Association, a thrifty smoker could roll as many as 150 cigarettes from it. Twenty cigarettes cost €8.45, though a preliminary ruling from the European Court of Justice last week found that Ireland's policy of setting a minimum price for tobacco products distorts competition. "I always smoked Marlboro Lights and it's only in the last year that I switched to rollies because I couldn't keep paying out €8.45 a pop," said John Murphy, 33, who works in sales and advertising. "I used to spend €100 a week on cigarettes and now I spend €16. "Ireland's culture of overcharging is a disgrace and if they continue to rip us off I'm going to buy it on the streets." Customs seized 3,144kg of roll-your-own tobacco in the first nine months, double the amount in all of 2007. Illicit tobacco products now account for 30% of consumption, the highest figure in the EU. Convenience stores say they are losing about €80m a year and are not benefiting from higher rolling-tobacco sales as much as they should be, Jennings says. "One member found that when a local gang got in on the act, his tobacco sales went down to 25% of what they had been," he said. Imperial Tobacco, maker of Golden Virginia, is enjoying a 15% increase in sales of the brand leader and has introduced discount brands such as Gold Leaf. Deirdre Healy of John Player & Sons, Imperial's Irish business, said: "Unlike cigarettes, which are a standard size, roll-your-own gives greater flexibility to control spending by rolling a cigarette as small or as large as you like. "Rolling tobacco has always been lower in Ireland than in the UK, accounting for about 2% of the market. But because of the times, we have increased our orders month-on-month." A recent analysis of smoking in the UK discovered a cultural shift in the use of tobacco, with more than one in four adult smokers using pouch tobacco. One in five white-collar professionals who smoke now use roll-ups, as do one in five female smokers compared with one in 50 in 1990, suggesting that the roll-up, favoured by actors such as Jeremy Irons and Kate Winslet, is now hip. "Rolling tobacco has become fashionable in certain quarters," Jennings said. "I think, though, that for most smokers, it's an inconvenience and they only go for it because of the value for money." Enditem