Cigarette Prices Surge: A Costly Trend That Shows No Signs of Slowing Down

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Are You Paying More for Cigarettes Than You Think?

Have you noticed that the cost of a pack of cigarettes is significantly higher than it was a few years ago? The increase in price seems to be overlooked when comparing it to the purchasing power of the citizens.
In recent years, cigarettes have faced various price hikes, and more increases are anticipated in 2025.

The 2024 Budget Law has projected an increase in tobacco product prices, including cigars, cigarettes, and inhalation products.
On February 2, the Customs and Monopolies Agency announced the new retail prices; for some brands, the price soared by 30 cents per pack.
As of 2024, the specific excise duty for 1,000 cigarettes will rise to €29.30, which is set to reach €29.50 in 2025.
It is evident that another price hike will occur in 2025, albeit more modest compared to this year.

Why Do Cigarettes Cost More Than We Think?

For years in Italy, wages have remained stagnant.
Although there have been slight increases in disposable income due to government bonuses and interventions, real salaries—those adjusted for inflation—have not changed much over the past three decades.

High inflation has inhibited even modest salary increases from keeping pace.
Consequently, workers are increasingly impoverished, often forgoing essential needs.
With a stagnant income, the cost of cigarettes has continued to rise.

For instance, in 2017, a pack of cigarettes ranged from €3.60 to €5.40, averaging at about €4.50.
By 2019, prices ranged from €4.60 to €5.70, averaging around €5.15.
Today, due to the latest price hike in April 2024, prices range from €4.90 to €6.40, averaging approximately €5.65.

A habitual smoker consuming one pack daily would spend an average of €1,642 in 2017, €1,879 in 2019, and €2,062 in 2024.
This represents a total annual expense increase of €420 or 25.57% over seven years.

The Rising Cost of Cigarettes

When considering the rise in cigarette prices, it’s crucial to understand that it’s not solely due to production costs and raw material expenses.
These price increases are intentional, as research indicates that higher prices can lead to a reduction in the number of smokers.

In Italy, tobacco-related deaths exceed 93,000 annually, with the economic burden estimated at around €26 billion, factoring in medical costs and lost productivity due to illness or death.

Given that increasing cigarette prices affects consumption, the decision to raise prices is partly aimed at discouraging smoking.
However, it’s noteworthy that cigarette prices in Italy remain lower than those in many Western European countries.
Consequently, a few years back, the Umberto Veronesi Foundation presented a petition to Parliament advocating for significant price increases, proposing to set costs over €10 per pack.

For now, we know that the 2024 Budget Law has enacted a price increase for cigarettes extending into 2025, and it is likely that tobacco prices will continue to climb in the following years.

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