Cigarette taxation has recently been modified in Spain. The process took place over six months, and may be relevant for other countries. In September 2005, as financial provisions for the National Health System were reviewed, a modest rise in tobacco taxes was approved, bringing the ad valorem component from 54% to 54.95% and the specific component from €3.99 to €4.20/1000 cigarettes. At the time, a smoking prevention bill was discussed in Congress, banning publicity and smoking in workplaces (with exemptions for the hospitality sector).¹ Most companies did not translate this rise into final prices.

By mid 2005, Altadis launched Ducados Blond, a low cost brand. At a historical low …