THE Cigarette Company of Jamaica (CCJ) yesterday announced an increase in the price of its products, in response to Government’s recent imposition of a 23 per cent excise tax on cigarettes to raise $1 billion for the National Health Fund.

The new recommended retail price for a pack of 20 Craven A or Matterhorn cigarettes is $180, up from $140. Matterhorn 10 packs will go for $90, an $11 increase; Rothmans and Benson and Hedges brands will sell for $50 more at $220; while Dunhills have a recommended price of $260 per pack, up from $200.

The new prices go into effect today.

Through the excise tax, Government expects to raise 45 per cent of the $2.2 billion for the National Health Fund from smokers. But yesterday, a CCJ official cast doubt on that target.

“The Government announced this tax last week and it is expected to generate some $1 billion; however, it is left to be seen as this is an unprecedented level of taxation,” said Patrick Smith, head of corporate and regulatory affairs at the CCJ’s parent company, Carreras Group Ltd.

The normal rate of increase, he said, was less than $200 million.

Last year, Government netted more than $2 billion from tax on tobacco products. And despite the widely held belief that cigarette consumption is relatively inelastic, Smith said sales have fallen over the last 15 years as a result of a combination of factors, including health conscious consumers who just decide to quit, and increased prices.

“We hope (the new tax and subsequent price increase) won’t cause further decreases in sales, but you can never be sure,” he said.