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Cigarette sales remain low in Florida

After the latest $1 per pack cigarette tax increase went into force in the mid-summer, sales dropped dramatically in the State of Florida, loosing roughly 50 percent in some places.

According to statistics, cigarette sales usually exceeded 100 million packs monthly across the state. However, in July, the month the tax was hiked, sales fell to 73 million packs, reaching 78 million in October, but still remaining essentially low.

While tax supporters are cheering the victory for public health, opponents pessimistic, saying that smokers have not given up, but simple switched to less expensive brands, other tobacco products, or even purchase their smokes elsewhere.

The state cigarette tax is currently $1.34 per pack up from 34 cents, a tax that had been valid ever since its approval in 1990.

James Waldman, major supporter of tax increase in the State Legislature praised the reduction in sales, saying that that tax had been working efficiently, and adding that if it was up to him, he would increase the tax by another dollar or even more.

The state tax increase is not only the one to be blamed for sales drop. April’s federal tax hike, is also partially responsible, as well as the fact that Florida is home to the largest number of job losses and foreclosures in the nation.

The most significant sales drop was registered in Miami-Dade County. Until the state tax increase, retailers were selling up to 9 million pack on average each month, whereas, in July they sold 4.4 million. Since then, sales rose to 6 million packs and remained steady.

In spite of shocking sales decline, the tax is generating the expected amount of revenue. Experts anticipated such drop, and predicted that the new tax would generate $ 1 billion within 12 months after introduction. In the first three months, it generated $300 million, sufficient enough to meet the target sum.

Whereas the tax increase was adopted to close holes in the state budget, facing the worst deficit in 20 years, local lawmakers keep affirming that improvement of public health was the principal target.

Experts think that dramatic sales drop will result in the decline in smoking rates, which are currently at 20%. However, it is not clear how much the rate would fall.

At John’s Cig Barn in Miami, whose proprietor supported cigarette makers, just a small part of the customers quit smoking, while other switched to discount generic brands, admitted manager Chris Stewart.

Instead of purchasing Marlboros, which are currently $6.29 per pack, many customers are switching to little cigars, or cheap Dosal brand, for $3.5 per pack.

Charles Crane, head of the Florida Associated Industries that battled against the tax hike, said that although the increase would make a small part of smokers give up, many will simply turn to existing illegal and semi-legal options, or opt for generic low-cost brands.

Crane added that there will be no significant reduction in smoking rates, as the major part of them would simply stop paying taxes.

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