Price increase on tobacco products

[REMOVED GRAPHICS] PRESS RELEASE June 13, 1997 PRICE INCREASE ON TOBACCO PRODUCTS On June 11, the Swedish Parliament passed the Govermental bill to increase the tobacco tax by 29 % as of August 1, 1997 As a result of this tax increase the consumer prices of tobacco products will be increased as of July 29, 1997. Due to administrative reasons, the increase in price will take place a few days before the tax increase. The consumer price for the market leader cigarette brand "Blend" will be increased from SEK 36.50 to SEK 44.50. The price for a pack of John Silver will be increased from SEK 37 to SEK 45 and the price of the low-price brand "Right" will be increased from SEK 35 to SEK 43. After Sweden's entry into the EU, a new tobacco tax system has been introduced in Sweden. For cigarettes, this system consists of a fixed part per cigarette and a floating percentage (value added) which is calculated on the basis of the set maximum consumer price. Each consumer pack must be labeled with this maximum price, which is determined by the manufacturer or the importer. According to the EU-directive on tobacco excise taxes, tobacco taxes shall amount to not less than 57 % of the consumer price. The new Swedish tax rate will mean a tax increase on cigarettes from approximately 53 % to approximately 56 % of the consumer price. Sweden has been granted a grace to achieve the 57 % tobacco tax level until the end of 1998. The maximum consumer price system applies to cigarettes only. For other tobacco products pricing is optional. New prices are, therefore, approximations (SEK): Current New price price Generalsnus (moist snuff) 18.00 21.50 /can Portion-packed moist snuff 17.00 21.00 /can John Silver Roll-Your-Own 49.00 59.00 /pack Hamiltons Blandning, (pipe 57.00 69.00 tobacco) /pack Bellman, (cigarillos) /pack 29.00 31.50 Accent No 1, (filter 28.00 33.00 cigarillos) /pack Breakdown of the consumer price for a pack of Blend (SEK): Ö Current New price price Manufacturer 4.76 5.28 Trade 5.25 5.40 Taxes, incl. 26.49 33.82 VAT The 36.50 44.50 consumers'pric e Breakdown of the consumer price for a pack of the moist snuff General Snus (SEK): Manufacturer 4.98 5.53 Trade 4.62 5.52 Taxes, incl. 8.40 10.4 VAT 5 The 18.0 21.5 consumers'pric 0 0 e For further information, please contact: Bo Aulin, Senior Vice President. Phone: +46 8 658 03 64 Mobile:+46 70 558 03 64 Home: +46 8 768 45 22 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1997/06/13/19990301BIT00220/bit0001.doc http://www.bit.se/bitonline/1997/06/13/19990301BIT00220/bit0002.pdf

About Us

Swedish Match develops, manufactures, and sells quality products with market-leading brands. Swedish Match’s product areas are Snus and moist snuff, Other tobacco products (cigars and chewing tobacco), Lights (matches, lighters, and complementary products), and Other operations. Production is located in six countries, with sales concentrated in Scandinavia and the US. The Swedish Match share is listed on Nasdaq Stockholm (SWMA). Swedish Match’s vision is a world without cigarettes. Some of its well-known brands include: General, Longhorn, White Owl, Red Man, Fiat Lux, and Cricket.

Subscribe