The prices of almost every commodity have soared in recent times, and cigarette packs are no exception. Even a single pack has become one of the priciest items in the Canadian market. The actual price of the pack of cigs varies depending on where you live and what kind of regulations are placed on that packaging. Keep on reading if you are curious to know about the factors that determine the price of a cigarette pack. 

What Is The Role Of Taxation?

Taxes are one of the major factors that decide how much does a pack of cigarettes costs. These taxes are imposed at two levels in Canada, namely, the federal and provincial levels. The final price of the cigarette packs can be found out after the inclusion of these taxes.

Federal taxes 

An excise duty is imposed on the tobacco products by the federal government. This duty is a specific amount applied per number of cigarettes within a package. At the moment, this rate is $0.95391 per 5 cigarettes. There’s also an annual adjustment of excise duty rates linked to the Consumer Price Index. This amount is revised on an annual basis. This means that the prices of cigarette boxes are not stagnant. Rather, they keep evolving with time. 

Provincial taxes 

After the federal taxes, each province levies its own taxes on the tobacco-based products. This leads to differences in the prices of cigarette packs across the country. Provinces like Manitoba and British Columbia have the highest rates for cigarette packaging. On the other hand, provinces like Alberta and Quebec are more affordable when it comes to buying cig packs. 

Cigarette inventory tax 

The cigarette inventory tax is an annual tax imposed on certain cigarette inventories in Canada every year. The current rate is $0.00501 per cigarette. According to this standard, a single carton of 200 cigratees would cost $1.002. The inclusion of this tax further increases the cost of cigar boxes.

How Much Does A Pack Of Cigarettes Cost?

The total number of cigarettes in a carton is 200 because in each carton there are 10 packs of 20 cigarettes. But the factor that persists is affordability. The prices might be lower, but the affordability of people matters a lot. Buying a carton of cigarettes is less costly than individual packs. This is because the cost per unit reduces when you buy in bulk from wholesale suppliers. But different provinces impose different amounts of taxes, due to which the overall price can vary. 

What Is The Link Between Packaging And Pricing?

Packaging has always played a crucial role in determining the sales of any product. It is no surprise that the prices of cigarettes are deeply impacted by the packaging. Certain measures have been adopted by the Canadian government to standardize cigarette packaging. These include:

Plain packaging policy 

Canada’s Tobacco Products Regulations aim to reduce the consumption of cigarettes amongst Canadian citizens, owing to the hazardous impacts they can yield on the lungs and overall body functioning. It became mandatory for all tobacco product packaging to be in brown colour. 

All the cigarette packaging that is manufactured now is devoid of all kinds of branding elements. There are no logos or trademarks on the display boxes or cartons of cigarettes. A standard font has been chosen, and it had to be adhered to by all means. 

Compliance cost

Many cigarette brands had to discard their previous packaging that featured their custom artwork and logos. New packaging has been introduced according to the designated colour and font. These changes fell heavily on their pockets, and to recover from such huge losses, they began to charge their customers extra. 

Compulsory health warnings 

Canada became the first country to mandate health warnings printed directly on individual cigarette sticks. Slogans that highlighted the negative impacts of smoking were printed on the retail boxes. 

Increased production cost 

The purpose of these labels was to create awareness among the masses. However, their addition added an immense amount to the budget of the tobacco businesses. This is because special setups were required to print these custom stickers. Because of these additional costs, the prices of the cigarette packaging skyrocketed. 

Anti-counterfeit packaging 

Curbing illegal trade has always been one of Canada’s main agendas. Tax stamps and specialized inks were used for verifying the authenticity of tobacco products and combating illicit trade. The incorporation of these security features added to the overall expenses for the manufacturer, who eventually passed down this burden onto the consumers. 

How Health Policies Impacted The Prices? 

It is no secret that cigarettes can have devastating health impacts that can be life-threatening in the long run. Special health policies were curated to discourage the public from tobacco consumption. Custom boxes for cigarettes were banned. A uniform packaging was introduced that was not as attractive as customized cartons. The other measures taken include: 

Flavor bans

A strict ban was imposed on some flavours like menthol. This was beneficial in reducing the consumption of cigarettes. But these bans shifted the market dynamics which required the revision of the overall cost of the cigarette pack.

Strict retail control

If you are wondering how much cigarettes are less commonly seen at the counter tops these days, then the answer to your curiosity lies in the strict regulations that do not permit the tobacco products to be displayed openly at the point of sale and counter tops. Such controlled policies compelled a shift in the marketing strategies that affected the pricing of the cigarette packaging to a great extent. 

What Is The Future Of Cigarette Packaging In Canada? 

It is predicted that the prices of the cigarette packaging will increase in the future. In case you are wondering how much a pack of cigs is going to cost in the coming days, here are some factors that will help you gauge the rise in estimated price. 

• Increased tax amount 
• Tighter regulations
• Decreased sales because of public health initiatives
• Affordability of the consumers
• Strict implementation of policies 

Conclusion 

It can thus be concluded that there are multiple factors that influence the cost of cigarette packaging. There is no one fixed answer to the question of how much a pack of cigarettes cost. In Canada, the prices of tobacco-based products are high because of strict regulatory policies and heavy taxation. Both federal and provincial taxes contribute to making the cost higher every year. Special packaging takes up exclusive setups, which can increase the prices multifold. So, watch out for regulatory policies that impact the overall cost of cigarette packaging.