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Hookah Bars Deal With Tobacco Tax Hike

Last updated on Tuesday, April 21, 2009

(INDIANAPOLIS) - The month-old increase in the federal tax on tobacco may have discouraged smokers. It has certainly added to the cost of doing business at the hookah bars.

Hookah, in case you don't know, has been a growth industry in recent years. Usually located in college towns like Bloomington and urban areas like metropolitan Indianapolis, hookah lounges are a Middle Eastern tradition, a laid-back alternative to the bars and taverns that are more conventional in this country.

"Michael", who manages the Ali Baba Hookah Lounge on Indy's northwest side, says business fell sharply after the tax increase, but it's making a comeback.

He says the Ali Baba offers an "experience," just as important, he says, as the 46 flavors of tobacco that his customers smoke from water pipes. Alex Khoury is absorbing the added cost of offering hookah after a meal at his Khoury's Mediterranean Island restaurant.

Khoury is reluctant to raise prices in the midst of a down economy. Both say they're concerned to hear the anti-smoking lobby proposing a total ban on smoking in Indiana someday.

But Khoury says he "will try something else" if that happens. Some hookah is purely herbal, he says. It contains no tobacco.

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