Cigarette prices are going up in Germany sooner than expected — Philip Morris is leading a 20 cent/pack rise in cigarette prices, moving Marlboro to € 4.00 per pack of 17 cigarettes in October from € 3.80 currently, and it will stay at € 4.00 even after the scheduled VAT rise in January 2007.

Analysts had expected a similar, or even slightly larger increase, but in January, so it is three months earlier than expected. They say that the price increase implies a 15 per cent manufacturer's price increase for Imperial's West brand for October-December, and a slightly larger increase for JPS. After the VAT increase in January, however, the net manufacturer's take will fall back to being only 5 per cent above today's level and about 10 per cent below December's level. (cg)