Nepal: Cigarettes in short supply as result of wholesaler hoarding

Several popular brands of cigarettes are in short supply in Nepal’s Kathmandu Valley due to hoarding and black-marketing by some wholesalers, according to Republica. Some wholesalers have begun to hoard cigarettes following media reports that the government was planning to hike excise duty on cigarettes through the budget for fiscal year 2015-2016. In addition to reducing supply, some wholesalers are also accused of raising prices in an arbitrary manner.

“It is very difficult to get [cigarettes] as per our demand,” retailer Ram Kumar Rai told Republica. “Not only are wholesalers reducing supply, they are also overcharging us for cigarettes.”

Rai said he was charged npr50 ($0.44) more for a box of Surya cigarettes containing 10 packets. “The wholesaler asked me to pay npr1,450 for a box of cigarettes which cost only npr1,400,” he said.

Retailer Madhav Timalsina, of Sundhara, paid npr1,500 for the same pack. “Wholesalers have been overcharging us, citing short supply,” he told Republica. “We are not getting cigarettes as per our demand, as wholesalers are hoarding them anticipating duty hike in upcoming budget.”

Meanwhile, manufacturers maintain that they have not reduced the supply of cigarettes.

“We have increased supply by around 10 percent recently,” Ravi KC, vice president of Surya Nepal, told Republica. “Our authorized dealers and cycle-boys have not reported us about shortage and hoarding of cigarettes.”

Department of Commerce and Supply Management officials have vowed to intensify market monitoring and to take action against anyone found guilty of hoarding cigarettes or participating in black-marketing.