Sep 9, 2009

Jinan Folks Fret about Floor-price on Cigarettes

Local residents in Jinan, capital of east China's Shandong Province, are complaining about a recent floor price imposed on cigarettes sold in the city, the Legal Daily reported on Wednesday.
The local tobacco authority of Jinan issued a regulation at the end of last year setting a minimum sale price for cigarettes, effectively driving brands that sell below five yuan a pack out of the local market.
The report quoted retailers as saying the rock bottom price for cigarettes sales will not impact their businesses that much, but will surely upset the city's migrant workers who can only afford cheaper smokes.
"My monthly income is only 900 yuan. Apart from my personal expenses, I have to save money to support my family. How can I afford cigarettes that sell at least five yuan each pack?" said a migrant worker from Southwest China's Sichuan Province.
Now, he and other migrant workers have to roll tobacco and make cigarettes themselves. 
Sun, a retired Jinan citizen who kept buying cigarettes for two yuan each pack for many years, was angry about the regulation.
"How come you can still get cigarettes for two yuan in cites like Beijing and Shenzhen, while we have to buy cigarettes above five yuan in Jinan?" Sun argued.
Some local retailers disclosed that in the tobacco market, higher retail prices garner more profit for retailers and companies. 
A professor in Shandong University's law department who preferred to remain anonymous said the introduction of the minimum price was illegal. 
On one hand, the regulation deprives consumers of their right to freely choose cigarettes of different prices and brands. On the other, the price margin imposed is in fact a disguised price-hike, which only central government departments have the authority to issue, meaning the Jinan Tobacco Bureau has overstepped its authority, the law professor added.

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