SYDNEY, Australia - The tobacco tax enacted by Australia Prime Minister Kevin Rudd has not slowed cigarette sales, but has instead caused sales of other products to decrease, the Daily Telegraph reports.

Small retailers, such as convenience stores, gasoline stations, newsagents and grocery stores, have seen a sharp drop in chocolate, magazines and soda purchases as smokers pay an additional $2.20 per cigarette pack. The 25 percent tax increase on tobacco began April 30.

"It??s definitely a noticeable effect: people won??t buy the magazine, the chocolate bar or the newspaper they used to buy with their cigarettes, but they??re still purchasing tailor-made cigarettes at the same rate," said Mick Daly, national chairman of IGA supermarkets.

"They are cutting back on some purchases and trading down on others, so they??ll either stop buying chocolate biscuits or move down to a budget brand," said Daly.

Merchants also worry about an uptick in contraband cigarettes. Retailers are mad about the increased tax, said Russell Zimmerman of the Australian Retailers?? Association. Impulse items can account for as high as 40 percent of a business??s sales.

"Smokers have to make choices, and they may include looking for cheaper sources of tobacco, or they may access the illicit (tobacco) market and some tobacconists are selling single cigarettes," said Sheryle Moon, executive director of the Australian Association of Convenience Stores. "People won??t disadvantage their families so they won??t cut back on groceries ?" they??ll cut out the impulse items."