Austrian tobacconists earned EUR 3.8 billion from tobacco sales in 2023, reports Kronen Zeitung.
However, they pay the largest share of this amount to the state, as 77 per cent goes to the tax authorities via VAT and tobacco tax. After mineral oil tax, tobacco tax is the largest consumption tax. “Tobacco tax revenue is expected to amount to EUR 2.081 billion in 2023,” says Finance Minister Magnus Brunner. Despite a decline in the number of smokers, higher prices and the switch to alternative products can stabilise sales and tax revenues, the report said.
Smokers in Austria lit almost 11.3 billion cigarettes in the same year. Around one in five people in Austria smoke regularly, but the trend has been pointing downwards for a long time. Lower-risk alternatives, growing health awareness and smoking bans are prompting more and more poeple to give up smoking. The tobacco market already recorded a decline of 3.5 per cent in 2022, although this was due to the previous increase during the pandemic, when domestic sales rose due to closed borders. However, the decline in the current year is probably actually due to a clear decrease in cigarette smokers.
Last year, the average price of a packet was EUR 5.77, almost 30 cents more than the previous year. Hannes Hofer from the monopoly administration emphasises that “the price growth is below inflation. Tobacco prices even had a dampening effect on prices and did not additionally fuel inflation.” An increase in turnover of 3.2 per cent to EUR 3.8 billion is also solid in comparison with other retailers.
While sales of traditional cigarettes are falling continuously, alternatives are becoming increasingly popular. Sales of HNB products jumped by 42 per cent to EUR 235 million. E-cigarettes and nicotine pouches – both products that are not subject to the tobacco monopoly – are gaining in popularity. Pouches generate sales of EUR 118 million and Austrians spend EUR 59 million on e-cigarettes. Although the taxation of tobacco alternatives is lower and no tobacco tax is payable on e-cigarettes and pouches, the industry and tobacconists achieve good profit margins with these products.