Â?Bob Hutchinson smokesÂ? a hand-rolled cigarette outside Johnny's Cigar Bar in downtown Boulder on Wednesday â   the same day that taxes on a pack of cigarettes increased 62 cents.
Â?Bob Hutchinson smokesÂ? a hand-rolled cigarette outside Johnny’s Cigar Bar in downtown Boulder on Wednesday â the same day that taxes on a pack of cigarettes increased 62 cents.

BOULDER, Colo. –

Eric Cormie lifted his right hand and looked down at the filtered Camel cigarette that was nestling between his index and middle fingers.

“I spend a lot on these,” said Cormie, 21, as he sat on a stoop in downtown Boulder on Wednesday.

And during the past couple weeks, he’s spent more. Manufacturers raised prices on their tobacco products in anticipation of a federal tax increase that took effect Wednesday. Taxes on a pack of cigarettes increased 62 cents — the largest hike in history — to $1.01 as a result of an act President Barack Obama signed into law in February to pay for a health insurance program for low-income children.

Cormie paid $5 for his current pack and said the price hike is making him think a little more about trying to snuff out the habit.

“This is a little bit more incentive for me to quit,” he said.

If he did, analysts and researches expect he won’t be the only one.

In a December research note, Goldman Sachs’ tobacco analyst said she expects the tax increase could lead to a 7 percent decline in industry-wide volume. Smoking levels have an inverse relationship to cigarette prices, according to the Campaign for Tobacco-Free Kids.

“There is an expectation, absolutely, that there will be a clear decrease,” said Jennifer Kovarik, program coordinator for Boulder County’s Tobacco Education and Prevention Program.

The local organization has experienced a noticeable increase in calls during the past couple weeks, Kovarik said.

The call volumes of stop-smoking help lines, including the Colorado QuitLine, were flooded during March, according to an Associated Press report.

At Lolita’s Market in Boulder, a sign taped to the front counter alerts customers that all cigarette prices are 75 cents higher. Most of the packs of smokes behind the counter on Wednesday were above $5.

Tobacco sales have dropped slightly at the 24-hour market, clerk Scott DeVries said, but he doesn’t think it’ll have a large-scale effect.

Although consumers have already paid more of a premium for cigarettes and other tobacco products during the past few weeks, they are not happy about it, said Mary Szarmach, vice president of trade marketing for Boulder-based Smoker Friendly International. Retailers, she said, could feel the burn.

Smoker Friendly budgeted a decrease in sales of about 7 percent, she said, noting analysts that have predicted the industry as a whole will be hit with a 5 percent to 12 percent decrease.

“We think that obviously April and May are going to be soft because of some of the people doing a little pantry-loading in February and March before the prices increased,” she said. “I think that after we get through this shock, and it was quicker than anticipated, I think we’ll probably level off and still see people smoking.”

Szarmach said the heart of the law behind the increase is in the right place, the legislation is flawed by raising taxes on what already is a “highly taxed commodity” and heavily affecting a lot people — especially those in the lower income brackets — as a result.

“I just don’t think they should hang that important of legislation on one user-group’s back in this country,” she said.

Considering the state of the economy, the timing of this increase seems to add insult to injury, said Jalin Malin, taking a quit smoke break on Pearl Street as the snow started falling Wednesday.

“I just feel it is kind of funny, they get you hooked on it and then others start herding you into corners and charging more and more,” Malin said.

Contact Camera Business Writer Alicia Wallace at 303-473-1332 or wallacea@dailycamera.com.

Archived comments

Tobacco consumers, once again, are hit with a huge tax hike in order to finance the poor childrens health care program, since people who don’t smoke are considered way too cheap to even be asked to contribute – but, hey, at least their teeth are white.

cordymac@hotmail.com

4/2/2009 10:19:15 AM

Actually, the tax took effect about a month ago.My hunch is that the retailers have been pocketing the extra revenue all this time.

InigoMontoya

4/2/2009 10:23:00 AM

This latest price hike makes me even gladder that I quit – it’s been 4 1/2 years now.I’ve never once regretted since that I kicked the habit.It’s sheer hell at first, but entirely worth going through it to be free of the addiction!

I hope this really does convince more people to quit smoking – it would be good for everybody…well, except the tobacco industry, and they’re getting rich encouraging people to commit a slow suicide with their products, so too bad for them!

Good luck to everyone who decides to kick the habit.

daravaleriah@yahoo.com

4/2/2009 11:22:15 AM

The line that it will affect poor people disproportionately is a load of hooey!Poor people are PRECISELY the type of person we want to stop/reduce smoking for, as they can’t cover the cost of a lung transplant down the road.

Yes, eventually (probably soon) SCHIP will need funds from elsewhere to account for the declining revenue, but I still see it as a win-win.

btm1001@yahoo.com

4/2/2009 11:25:31 AM

“Taxes on a pack of cigarettes increased 62 cents — the largest hike in history — to $1.01 as a result of an act President Barack Obama signed into law…”

On the campaign trail, BO repeatedly made a “firm pledge” that he would not raise ANY taxes–income, payroll, yadda yadda–on any person making less than $250K.

I guess a “firm pledge” is not a promise.

Change you can believe in.

You can. I don’t.

orbison

4/2/2009 11:45:19 AM

How is Obama going to keep his promise and make sure that people who make under $250,000 are not going to pay this new federal tax increase?

bouldermeister

4/2/2009 11:46:54 AM

“I can make a firm pledge,” Obama said in Dover, N.H., on Sept. 12. “Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”

bouldermeister

4/2/2009 11:51:08 AM

yay! tax this vile habit. now we need “large automobile” tax, or, a tax break for people who choose non-motorized commuting alternatives– (except taking the Bus )

gotta pay to play…

t.pull@hotmail.com

4/2/2009 1:15:17 PM

Now if they’d require a nickel deposit on each cigarette butt we’d really be able to clean up!

Also, why should non-smokers have to pay for an ashtray in a car when smokers and non-smokers never use them anyway? Make it an option like air conditioning or something…

Take note: the fine for throwing a cigarette butt out a car window is $1,000. I guarantee the cities will commence enforcing this as a means of balancing their budgets… it’s about time.

jtfay

4/2/2009 4:56:19 PM

Death by Smoking Ban

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http://www.forces.org/Forces_Articles/article_viewer.php?id=590

Tobacco Hysteria

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http://www.geocities.com/madmaxmcgarrity/Myth2.htm

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cordymac@hotmail.com

4/3/2009 9:56:53 AM