On January 20, the Minister’s Council approved a significant increase in the tobacco tax, trying to asphyxiate smokers in a fiscal cloud. As a response to the Anti-tobacco law and the decree on tobacco fiscal policy, the Spanish-French tobacco company Altadis announced it would raise the prices of their main brands. However, Philip Morris took the unexpected business decision of lowering the price of classic brands like Marlboro and Chesterfield. For the first time in history, the Spanish cigarette brand Fortuna will be more expensive than Marlboro. Suddenly, as if by magic, the consumer has seen a beam of competition in one of the historically most intervened markets. It is sad it happened in response to a series of interventions whose impact has seriously damaged the industry, but the truth is once consumers and industry have been assaulted, the best thing is to have a company like Philip Morris come up with a competitive survival strategy.

 

Cigarette sellers (in Spain owners of government regulated official shops) reacted with insolence and disdain toward their clients, something only the privileged can afford to do in an open society. They demand, of course, the government impose a minimum price of two euros for every pack of cigarettes. On Tuesday January 31st they are meeting to decide how to lobby to defend the proposals they want to force through. In order to win and hurt the consumer, they are considering refusing to sell the cheaper brands or even closing their shops. This is an intolerable attitude because as Juan de Mariana explained in 1609: “tobacco shops are just like taxes because it all goes to the same place, and one way or the other the prince takes his vassal’s estate”. In this case, tobacco sellers take consumers’ property thanks to their privileged status as delegates of the prince, that is, of the State. It is typical for them to think their stealing is legitimate just because it is legal.

 

It is understandable, but not acceptable, privileged groups attack consumers, but it is really surprising the main consumer organization OCU decided to applaud the government’s tax raise and Altadis price hike, and it even asked the administration to raise prices again. Instead of a consumer organization, OCU seems to be an organization of cheerleaders for state intervention, favoring policy designed to hurt consumers’ interests. Recently, these impostors said “the administration’s pending issue is to raise taxes on tobacco even more so the people will stop buying them”. There is no doubt that OCU is unmasking itself.

 

While the state, the government and the privileged tobacco sellers attack tobacco consumers, at least there is some good news. The Madrid Association of Consumers and Taxpayers (Asociación Madrileña de Consumidores y Contribuyentes) welcomed Philip Morris’ price cut and criticized tobacco sellers’ “mafia-style threat” to refuse to sell while holding exclusive rights over tobacco’s distribution, and attempting to use consumers as “hostages to extort the American tobacco company.” Moreover, in a further demonstration of their determination to defend consumers and individual freedom, Javier Alonso, President of the Madrid Association of Consumers and Taxpayers said “this is all just a palpable demonstration of the indeterminate damage inflicted on consumers by regulations and restrictions to the free market, in this case the tobacco market.” The creation of this organization is great news for smokers but also for consumers as a whole.