Wholesalers are hiking up tobacco prices, leaving retailers to absorb additional costs or go against industry advice to maintain RRPs.
According to retailers, several wholesalers have increased prices in their cash & carries.
“From speaking to other retailers, I know Blakemore, Batleys and Booker are doing it, and it’s not just one or two pence,” said Bay Bashir of Bellevue Convenience (Lifestyle Express) in Middlesbrough.
“If wholesalers need to put their prices up, how can I stick to RRPs?”
Another retailer, who did not want to be named, said: “Retailers have noticed Booker going above RRPs. They’re making a better margin for themselves, but creating challenges for us.”
Leicestershire retailer Raj Aggarwal warned that this could prompt retailers to create “rip-off prices” and drive shoppers to supermarkets.
“The key is educating customers – without PMPs, they’ll lose their sense of security,” he said.
Last month, Bestway issued advice for retailers around pricing, urging them to stick to RRPs.
“I firmly believe that it’s RRP or RIP for many independent stores,” said managing director Martin Race.
Richard Booth, Bestway’s director of trading, tobacco & category management, said the wholesaler stood by this advice.
“It makes no sense for us to inflate RRPs, which irresponsibly confuses the retailer,” he said. “We work with tobacco suppliers to ensure our prices accurately reflect their RRPs. If there have been any pricing discrepancies, it’s a system error, which we will look into.”
A Booker spokesperson said: “Our pricing position has not changed in the past five years, and therefore the cash differential has not changed. Our RRPs are simply a guideline, and we would advise retailers to check their local market and price accordingly.”
Jeremy Blackburn, head of communications at JTI, advised retailers to keep their prices as competitive as possible.
“Existing adult smokers are likely to become more price aware as the market starts to adapt to the changes in pack appearance and minimum pack sizes come into play, so it is important to maintain competitive pricing,” he said.
“It is therefore JTI’s recommendation to sell tobacco products at or below the recommended retail price in order to retain the sales and footfall of existing customers and continue to profit from the category.”