It can be a vicious cycle. Someone raises price for whatever reason. Their competitors see that and think "well, if it works for them, it'll work for us". Their suppliers see the price rise and want a share of it, so raise theirs too. New players entering the market will likely set prices based off competition, even if the competition has actually set inflated prices. Eventually even companies that wouldn't want to raise prices arbitrarily has to because it's now inflation and their costs have risen.
Even without direct colusion, many companies still end up all following each other.
Yeah, it's unfortunate. I understand it. The flavours do make smoking more enticing to young people, who might not limit themselves to one cigar a month like you do. But it does suck to ban something outright just because some people will misuse it. Mind you, nicotine is addictive, which is a pretty critical facet to this (though I don't think anyone starts smoking without knowing this risk).
I dislike smoking in general and do want things that are good for society as a whole. But the logic of banning stuff like this seems similar to, say, banning fast food because some people will overeat (or more extreme, having calorie rationing so that people can't overeat on any kind of food). It's admittedly always a balancing act for how much danger is acceptable before we just ban it for everyone. Some bans using this logic are very reasonable, some aren't, and many are extremely debatable.
I think I currently prefer the sin tax approach, especially since that best accomodates occasional usage. A hefty tax makes the dangerous thing less accessible to impressionable young people and helps pay for the social cost (though IIRC, smokers actually cost society less because they die younger, reducing the many medical costs of old age). Price influences people's choices, too. If healthy food is cheaper than unhealthy food, that encourages buying healthy stuff. But even sin taxes are imperfect, especially in a vacuum. They can make the cost of living higher for a vulnerable population. They need to be planned carefully.