Tobacco.org

• Slovak Smokers Dodge 26% Tax as Cheap Cigarettes Flood Market 

Novotny is among 1.3 million smokers in the eastern European country benefiting from an unlikely tax break. Imperial Tobacco Plc and Altria Group Inc., the makers of Davidoff and Marlboro cigarettes, flooded warehouses with more than 200 million packs before a 26 percent increase in the government levy on tobacco was introduced on Jan. 1. This strategy allows retailers to sell them at last year's prices, or about half of what they cost in Germany.

Smokers aren't the only ones benefiting. The Slovak economy expanded 14.1 percent in the fourth quarter, the fastest pace in the 27-nation EU, with cigarette taxes and tobacco stockpiling contributing 4.4 percentage points to growth in gross domestic product.

``We included some tobacco products stock-building in our forecast, but the 4.4 percent of GDP is breathtaking,'' Miroslav Plojhar, an economist at JPMorgan Chase & Co. in London said in a research note. ``It seems that tobacco factories had to work all day and night to produce such a huge amount of cigarettes.''

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