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Mong kok newspaper vendors delay boycott of cigarette brand winner after tax rise

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Mong Kok newspaper vendors last night decided to postpone a planned boycott against Winner brand cigarettes in protest against a reduced share of profits.

It came after a 2 1/2 hour meeting between about 10 vendors and a representative of the maker of Winner, mainland firm Nanyang Brothers Tobacco. The vendors agreed to delay the boycott for a week to give Nanyang time to consider their demand not to raise the wholesale price.

Nanyang raised the cigarette brand’s wholesale price by 60 HK cents per pack to HK$40 shortly after the budget last month imposed a HK$4 rise in tobacco duties with immediate effect. But it kept the sale price at HK$43.

In doing so, vendors said, the company shifted part of the tax burden to them, cutting their profit per pack from HK$3.60 to HK$3. Newsstands across the city are not allowed to set their own prices. They must sell cigarettes at uniform prices set by the respective tobacco companies.

Earlier yesterday, most newsstands in the area had cleared their shelves of the brand. Some in Central, Sham Shui Po and Tsuen Wan, who had planned to follow suit, last night said they would also delay the boycott.

“For every 10 packs of cigarettes we sold before the ‘HK$10 tax’ in 2009 , we used to earn one pack’s worth of profit in terms of wholesale price ,” said May Tse, a vendor outside Langham Place. “Now, the profit is only about 70 per cent of a pack for most major brands.” Tse was referring to a tobacco tax rise in 2009, with an extra HK$8 to HK$12 charged per pack. In the February 26 budget, the tobacco duty was raised by HK$4 per pack.

Vendors who initiated the boycott said although Winner was not a popular brand, they aimed to send a message to other tobacco firms not to follow suit. Another vendor, Li Wing pak, said cigarette sales accounted for about one third of his income. He feared more tobacco firms would follow Nanyang’s lead.

“If the tax continues to go up driving up the price of a pack of cigarettes to HK$84 eventually as some anti smoking groups have suggested we will end up making almost no profit,” he said. “Our demand is simple we just want the wholesale price to stay the same as before the tax increase.”

Earlier yesterday, Newspaper Hawker Association chairman Bacon Liu Sair ching voiced support for the Mong Kok vendors.

The association said it was in talks with three major tobacco companies that dominated the local market about reducing wholesale prices. Nanyang did not respond to media inquiries by press time.