Israel – Two months after the tax reforms on cigarettes and alcohol there is a change in the consumption habits of Israelis. A survey by C.A. Marketing Information Institute headed by Noam Raz and Meirav Schapira found that 44% of those who drink alcohol have reduced their consumption, while 60% of smokers have reduced the number of cigarettes that they smoke. The survey covered consumption in June, before the tax hike, and August, after it.
As part of the tax reform and purchase tax hikes on alcohol, for example, a bottle of arak rose in price from NIS 84 to NIS 105. The new tax was not only based on price but also took into account the level of alcohol in drinks. The main hikes were on cheap spirits like arak that have high alcohol content.
At the same time the tax on cigarettes was raised by 18% with the minimum price for a pack of cigarettes rising to NIS 12.
Consequently the monthly expenditure on alcohol consumption by those who consume such beverages fell by an average of NIS 30 and stood at NIS 130. The number of people who abstain from alcohol has risen from 17% before the reform to 29%.
5% of Israel’s adult Jewish population claimed to have stopped smoking since the tax reform, and 33% said they had significantly decreased their smoking.
Source: GLOBES ISRAEL