Bloomberg's tobacco tax cuts smoking by two thirds in a month

New York is gasping for a smoke. Or it will be soon. Statistics published yesterday showed a draconian anti-tobacco tax imposed by the Mayor in July caused a two-thirds drop in sales of cigarettes in the city last month.

The effects of Michael Bloomberg's huge tax are becoming clear. He is separately pressing for laws that would give New York the toughest anti-smoking regime of any city in America. Citing passive smoking risks, he wants to stub out cigarettes in all restaurants and bars.

Smokers in the city are already reeling. On 1 July, Mr Bloomberg raised the city tobacco tax from 8 cents to $1.50 a pack. It is not unusual now to pay $7.50 (£4.83) for a pack. Those who cannot kick the habit have been impelled to look for cheaper sources of their favourite brands, either from the internet or from Indian reservations where they can be bought tax-free.

The fall-out has been shocking also for many small retailers, who depended on cigarette sales for about 20 per cent of their revenues. The figures, in the New York Post, show that sales across the counter were down 64 per cent in September, compared with last September. And the city council is expected to vote next month on the package of regulations unveiled by Mr Bloomberg in the summer. He has based his proposals on the contention that passive smoking harms the health of thousands employed by the restaurant and bar business.

Testifying before a rowdy session of the council a week ago, the Mayor said his proposals would "preserve lives, extend lives, save lives". He added: "In fact, it will almost certainly save more lives than any other proposal that will come before this chamber."

Smokers' groups have reacted angrily, and a counter-campaign has been launched by restaurant groups, who say the industry is already suffering from an economic downturn and the effects of last year's terror attacks. At present, smoking is allowed in all bars and in restaurants with fewer than 30 seats.

Chuck Hunt, vice-president of New York's Restaurant Association, said: "Frankly, they are fearful of anything that even remotely suggests it might negatively impact business. It's hard to argue against the health aspects of this ... but the big issue making so many opposed to this is the fear of failure of their businesses."