Yesterday, parliament delayed discussion about cigarette excise tax for most probably 6 November.
Our view:
There are still two variants of possible tax increase for 2007. CSSD’s variant of EUR 62 and ODS’s variant of EUR 60 per 1,000 sticks. However ODS seems to soften its attitude as it could have negative effects for 2007 budget. We see the uncertainty about excise hike as negative for the sector as pre-stocking limitation is expected to be discussed jointly with it. Thus it leaves less time for tobacco producers to react if pre-stocking limitation is not passed.