Okaz/Saudi Gazette JEDDAH – Traders and importers resorted to different ploys to profit from the interim period before the decision to impose an additional 100 percent tax on tobacco products and 50 percent tax on beverages including energy drinks came into effect, informed sources said. Importers and wholesalers did not supply enough quantity of cigarettes and energy drinks to shops and supermarkets since at least week before the new tax came into effect. The shortage in supply was visible three days after the application of tax, they said. Traders mixed their previous stocks with new supplies and sold both at the same rate to consumers, according to a survey of shops and warehouses conducted by Okaz/Saudi Gazette. The additional tax was imposed 15 days ago. "The traders started selling cigarettes and energy drinks at new prices the night before the imposition of tax, even though they had received the stocks several days ago," one source said. He said they raised prices of some beverages and energy drinks by 100 percent, instead of 50 percent as mandated. "For example, they sold a 2.25 liter bottle of beverage from a specific company for SR6, instead of SR4.5 after raising it from the previous price from SR3," he said. They did this even though a competitor supplied the same quantity of the drink at SR5. Another ploy applied by the beverage companies was to reduce the size of the bottles, the source said. The size of a 355ml can of drink that used to be sold for SR1.5 previously was reduced to 330ml just before the new tax came into effect. However, some traders sold the bottles with reduced size for SR2 instead of SR2.25, thus cutting the price by 11 percent, the source said.
