[Beasty]

Because you don't pay for labor either.

There's no such thing as money. Only nationalized industry. You work in your field, whatever it is, and that byproduct is inherently public property. That product then is registered into a government database which utilizes a complex algorithm which takes data collected by the government assessment on resource and good usage, need and surplus and with some weights and a tad bit of user input, this algorithm decides which resources and goods go where they are needed. The direction is then sent back to the good/resource production, where it is then tracked by unique ID number and each unit is directed to where it is needed.

Of course, you wouldn't need to create one of everything for everyone. For instance, you don't need your own car, do you? Not when you could simply manufacture a few buses to cover your entire local area. That's the idea, only expending what you need and being smart with societies resources. That's not to say wants don't matter, because they do. A little bit of luxuries is a need.

The reason I said it "wouldn't be produced in the first place" is because there is no real reason or incentive to waste resources on tobacco products, so in the long run they probably wouldn't exist.