Smokers to feel the pinch in 2013

The cost of cigarettes in Luxembourg is expected to rise considerably by 2013, closing the price gap between the Grand Duchy and neighbouring countries.

Finance minister Luc Frieden predicted the rise in his answer to a parliamentary question by deputies Josée Lorsché and François Bausch.

The pair raised concerns about the country's contradictory policies- to reduce smoking while making money off the sale of tobacco products to cross-border workers through tobacco tourism.

Mr Frieden pointed out that since 1993, there are no restrictions on purchasing goods for domestic use elsewhere in the EU, provided the buyer transports it themselves.

However, he added that the minimum excise duty on tobacco will rise by 2013. The duty on rolling tobacco, for example, is expected to rise from 40% to 43% by 2013.

He said: “Clearly, by 2013 the Grand Duchy will inevitably increase prices for sales of tobacco products. These increases will automatically reduce any differentials with neighbouring countries.”

Already 90% of tobacco sold in Luxembourg is bought by foreigners, many of which will drive from as far away as Nancy for their nicotine fix.

France hiked its tobacco prices by 6% this month and will raise them a further 6% in 2012. The result will mean that smokers who buy their cigarettes in France will pay 30% more for a packet of 20 cigarettes (6.50 euros) than they would in Luxembourg, where the same packet would cost 4.50 euros.

The differences in cost of a packet of 20 Marlboros

Luxembourg 4.40 euros

Belgium 5 euros

Germany 5.15 euros

France 5.90 euros

Italy 4.90 euros

Spain 4.25 euros

Portugal 4 euros

Holland 5.50 euros