3 million, this is 4.1 pounds per person a year. This 

 compares with 2.2 pounds per person for the United 

 Kingdom and 3.7 for Dermiark. 



Cigarette Retail Prices 



Ireland's most popular cigarette brand sells for the 

 equivalent of 57 U.S. cents per pack of 20. This 

 cigarette is 70 mm. long. Eiglity mm. cigarettes 

 (including filter tip) sell for about 66 U.S. cents. 



The components of the retail price of a package of 

 20 cigarettes are: Fiscal charge 70 percent, wholesale 

 price and distribution cost 15 percent, retailer 10 

 percent, and value-added tax 5 percent. 



Tariff Harmonization 



Ireland's revenue duty or "customs duty" is 

 £4.416 (US $10.60)^ per pound for unstemmed leaf 

 from any source; and £4.418 (US $10.60) for 

 stemmed leaf from MFN sources and £4.416 for 

 stemmed leaf from the United Kingdom. The £4.416 

 will continue in effect as the equivalent of an excise 

 tax after accession in January 1973. The "duty" for 

 purposes of harmonization with the CXT will then be 

 considered zero for unstemmed leaf and £0.002 per 

 pound (the margin of preference or current difference 

 between the MFN rate of £4.418 and U.K. rate of 

 £4.416) for stemmed leaf. The margin of preference 

 of £0.002 is equivalent to US $0.0048 or nearly zero. 

 For the purpose of this paper it will be called zero. 



After accession, the duty on EC tobacco and 

 tobacco from Greece, Turkey, and probably from 



other countries with EC preferences will then be zero 

 and will remain at zero. The duty on tobacco from 

 third countries is expected to be zero from January 1 , 

 1973, until January 1, 1974, at which time the duty 

 will become 40 percent of the CXT as provided in the 

 Treaty of Accession. The duty on tobacco from third 

 countries will become 60 percent of the CXT on 

 January 1, 1975, 80 percent on January 1, 1976, and 

 100 percent on July 1 , 1977. 



The duty for cigarettes probably wiU be con- 

 sidered the difference between the preaccession pref- 

 erential rate of £4.470 (US $10.73) and the full rate 

 of £5.243 (US $12.58) per pound. This difference 

 probably wall be considered as the "protective ele- 

 ment" which must be harmonized with the EC's CXT 

 of 90 percent ad valorem. 



Ebccise Tax Harmonization 



The excise tax of about US$10.60 per pound of 

 leaf tobacco is expected eventually to be harmonized 

 to whatever common level of excise tax is decided 

 upon by the EC. 



Value-Added Tax Harmonization 



Ireland adopted a value-added tax November 1, 

 1972. The level for cigarettes is 5.26 percent. This 

 replaced the 5-percent sales or "turnover" tax which 

 applied to tobacco products so that the retail price of 

 cigarettes did not increase. The VAT is applied in 

 addition to the excise of about US$10.60 per pound. 



DENMARK 



Denmark imported 30 million pounds of leaf 

 tobacco in 1971, of which the United States suppHed 

 45 percent. Much of the balance was cigar tobacco 

 primarily supplied by Brazil and Indonesia. Denmark 

 is believed to have the world's highest per capita cigar 

 consumption. 



The average value of Denmark's 1971 tobacco 

 imports was 88 U.S. cents per pound. U.S. tobacco 

 exports to Denmark in 1971 average 96 U.S. cents 

 per pound but stripped, flue-cured exports (lamina), 

 which accounted for 44 percent of the total, averaged 

 US$1.21 per pound. 



There is considerable trade in tobacco products 

 primarily as a result of zero duty with other EFTA 

 members. For example, 1971 cigarette consumption 

 was 6.5 bilUon pieces. One billion were imported and 

 2 biUion were exported (Table 5, Appendix C). 



At the mid-October 1972 market rate of $2.40 per 

 Irish £. 



Consumption 



Tobacco utilization by the Danish industry in 

 1971 was about 36 million pounds, of wliich about 

 1 8 miUion was for cigarettes, 1 1 million for cigars, 

 and 7 million for smoking tobacco and other prod- 

 ucts (Table 3, Appendix C). 



Denmark is a net exporter of cigarettes and 

 smoking tobacco. Trade in cigars and cigarillos is 

 quite small with imports slightly exceeding exports. 



Average cigarette consumption in 1970 for persons 

 15 years and over was 1,700 pieces, compared with 

 an average of 2,380 for all nine EC countries and 

 3,880 for the United States. Cigar consumption, on 

 the other hand, averaged 277, highest for the EC-9 

 and far above the EC average of 50 and the U.S. 

 average of 59 (Table 4, Appendix. C). 



Smoking tobacco is both exported and imported. 

 Production of other products (mostly smoking 

 tobacco) in 1971 was estimated at 7 million pounds. 



