The price of a pack of 20 cigarettes rose by about a dollar.
In a Dunedin supermarket last night, before the rise came into effect, prices for a pack of 20 ranged from $9.90 to $11.59.
The Government brought legislation to Parliament under extraordinary urgency yesterday and last night passed the Bill by 118 votes to 4.
The effect of the tobacco excise Bill is to implement three excise duty increases of 10% - one last night, the next on January 1 next year and the third on January 1, 2012.
Loose tobacco was hit twice - first with a 14% increase immediately to bring it into line with cigarettes and then raised further by the 10% excise rise affecting all tobacco products.
Staff at several Dunedin retail outlets reported strong demand last night, with some people inquiring about cartons of cigarettes.
Smokers spoken to by the Otago Daily Times last night reacted with a mix of emotions ranging from anger - one man branded the rise "criminal" - to resigned acceptance.
Dunedin resident Geoff Fraser joked that he "should have given up when I left school" but said the rise could encourage more people - including himself - to quit.
Associate Health Minister Tariana Turia, a strong anti-smoking campaigner, introduced the Excise and Excise-equivalent Duties Table (Tobacco Products) Amendment Bill and said the debate on it was going to be about life and death.
"We know that putting up the price is a powerful tool to reduce smoking," she said.
"It forces people to cut back, but more importantly it provides a strong incentive for smokers to quit and helps dissuade young people from starting."
The Quit Group said the number of people contacting Quitline for help to stop smoking might double or even triple.
"The last time we saw a significant taxation increase for tobacco was back in May 2000.
Overnight, we saw our call volumes almost triple from 6000 to 16,000 calls per month," Quit Group chief executive Paula Snowden said.
Mrs Turia said 21% of New Zealanders over 15 smoked and tobacco caused 5000 deaths a year.
"Helping smokers quit is a priority of this Government and one of our health targets."
The Salvation Army applauded the move but wished the Government would act as harshly against alcohol.
"We hope a government willing to recognise the harm tobacco causes will have the courage to more heavily tax alcohol, which has even wider community costs and detriments," spokesman Major Campbell Roberts said.
The Drug Foundation said the decision on tobacco put the Prime Minister's rejection of an excise increase for alcohol in stark contrast.
Progressive Party leader Jim Anderton said he would support the legislation but lashed the Government for not raising the excise on alcohol.
"The ink has barely dried on the Law Commission's report when Justice Minister Simon Power rejected the report's recommendation for a 50% increase to the excise tax on alcohol," he said.
"And 24 hours later it's agreed to keep the Maori Party happy and rush a Bill through Parliament under extraordinary urgency to increase the price of tobacco."
The Royal New Zealand College of General Practitioners welcomed the excise tax, saying it would improve the health of many people.
More than one in five New Zealanders still smokes tobacco regularly and smoking prevalence was much higher for Pacific Islanders (28%) and Maori (44%), the college said.
• Australia will force tobacco companies to adopt plain packaging, removing all colour and branding logos, within two years, to cut smoking-related deaths, government sources said, Reuters reported yesterday.
