Tobacco industry pricing undermines tobacco tax policy: A tale from Bangladesh

2020 ◽  
Vol 132 ◽  
pp. 105991 ◽  
Author(s):  
Nigar Nargis ◽  
A.K.M. Ghulam Hussain ◽  
Mark Goodchild ◽  
Anne C.K. Quah ◽  
Geoffrey T. Fong
Addiction ◽  
2013 ◽  
Vol 108 (7) ◽  
pp. 1317-1326 ◽  
Author(s):  
Anna B. Gilmore ◽  
Behrooz Tavakoly ◽  
Gordon Taylor ◽  
Howard Reed

2017 ◽  
Vol 27 (5) ◽  
pp. 488-497 ◽  
Author(s):  
Rosemary Hiscock ◽  
J Robert Branston ◽  
Ann McNeill ◽  
Sara C Hitchman ◽  
Timea R Partos ◽  
...  

ObjectiveTaxation equitably reduces smoking, the leading cause of health inequalities. The tobacco industry (TI) can, however, undermine the public health gains realised from tobacco taxation through its pricing strategies. This study aims to examine contemporary TI pricing strategies in the UK and implications for tobacco tax policy.DesignReview of commercial literature and longitudinal analysis of tobacco sales and price data.SettingA high-income country with comprehensive tobacco control policies and high tobacco taxes (UK).Participants2009 to 2015 Nielsen Scantrak electronic point of sale systems data.Main outcome measuresTobacco segmentation; monthly prices, sales volumes of and net revenue from roll-your-own (RYO) and factory-made (FM) cigarettes by segment; use of price-marking and pack sizes.ResultsThe literature review and sales data concurred that both RYO and FM cigarettes were segmented by price. Despite regular tax increases, average real prices for the cheapest FM and RYO segments remained steady from 2013 while volumes grew. Low prices were maintained through reductions in the size of packs and price-marking. Each year, at the point the budget is implemented, the TI drops its revenue by up to 18 pence per pack, absorbing the tax increases (undershifting). Undershifting is most marked for the cheapest segments.ConclusionsThe TI currently uses a variety of strategies to keep tobacco cheap. The implementation of standardised packaging will prevent small pack sizes and price-marking but further changes in tax policy are needed to minimise the TI’s attempts to prevent sudden price increases.


2020 ◽  
Vol 29 (Suppl 4) ◽  
pp. s275-s280
Author(s):  
Anh Nguyen ◽  
Hoang The Nguyen

BackgroundOne of the most significant barriers to tax reform and tax rate increases in Vietnam is the threat of illicit trade promulgated by the tobacco industry. The industry argues that higher taxes will stimulate smuggling, thereby undermining tax policy objectives and impairing the domestic tobacco manufacturing. Unfortunately, there is a dearth of updated and independent studies to verify this claim and inform the tax reform in the country.ObjectivesThe present paper attempts to generate new estimates of the illicit consumption and compare them to a prior study to ascertain the changes in the levels of the illicit trade after a tobacco excise tax increase.MethodsThe study uses primary data collected from the Tobacco Consumption Survey in late 2017. It is a multistage cluster random household survey, covering a sample size of over 2700 smokers, and purposively designed to make its results comparable to prior estimates, which have been done before the tax increase. Particularly, we collect packs from selected smokers and perform careful inspection to identify the prevalence of illicit products. In addition to the consumption, we collect data on brand choices, cigarette prices, the types of stores that the smokers bought their cigarettes, as well as their socioeconomic characteristics. They allow us to determine the regional variation of the illicit trade, identify the main illicit cigarette brands, compare the prices of the licit and illicit cigarettes, and examine the main sources of the illicit cigarettes. Incomes of the licit and illicit cigarette smokers are also compared.ResultsContrary to the tobacco industry’s predictions, our estimates demonstrate that the level of the illicit trade declined even after the increase of taxes imposed on tobacco products in Vietnam. The illicit cigarettes account for only about 13.72% of the total cigarette consumption in Vietnam in 2017, lower than the 20.7% estimate in 2012 done by the previous study. The illicit cigarettes are heavily concentrated in the southern provinces of Vietnam bordering Cambodia, and locally accessible to the smokers from grocery stores. Jet and Hero are the two most popular brands, representing over 80% of total illicit consumption in the country. Interestingly, the illicit cigarettes are on average more expensive than the illicit products in Vietnam, unlike many other countries where the former are typically cheaper than the latter. Consequently, as is to be expected, the illicit cigarette smokers tend to earn higher incomes than those smoking the licit products.ConclusionsRaising the taxes levied on tobacco does not necessarily cause higher illicit consumption in Vietnam as widely stated by the tobacco industry. The Government of Vietnam should recognise the tobacco tax policy as the most effective and cost-effective tobacco control measure and establish a clear road map of progressive tobacco excise tax increases so that total tax levied on tobacco accounts for at least 75% of retail price as suggested by the WHO to reduce smoking prevalence in the country.


2019 ◽  
Vol 28 (e2) ◽  
pp. e102-e109 ◽  
Author(s):  
May C I van Schalkwyk ◽  
Martin McKee ◽  
Jasper V Been ◽  
Christopher Millett ◽  
Filippos T Filippidis

BackgroundThe tobacco industry (TI) can act to undermine the impact of tobacco tax increases by adopting various pricing strategies. Little is known about strategies used across the European Union (EU), except for the UK.AimTo examine pricing strategies adopted by the TI in the EU, and whether they differ by cigarette price segment, or between manufactured and roll-your-own (RYO) cigarettes.MethodsThis is a longitudinal analysis of commercial pricing data for manufactured and RYO cigarettes from 23 EU countries in 2006–2017. Price and revenue trends were explored. Linear regression estimated the average annual change in revenue, and linear fixed-effects panel regression models were used to explore the association between changes in median revenue (net of tax and adjusted for inflation) and tax increases in different price segments of manufactured cigarettes.ResultsOver the 11-year period price gaps were observed in all countries. The average annual adjusted median net revenue per pack increased in 19 of 23 countries for manufactured and RYO cigarettes. A tax increase was associated with a significant decrease of −€0.09 in adjusted median net revenue per pack (95% CI −0.16 to −0.03) in the cheap cigarette price segment, while no change was detected in the expensive cigarette price segment (−€0.05, 95% CI −0.11 to 0.01).ConclusionAcross the EU, pricing strategies adopted by the TI maintained or increased price gaps and retained cheaper tobacco products in the market, diminishing the impact of tobacco tax increases. Further strengthening of tobacco taxation policy is needed to maximise public health impact.


2021 ◽  
pp. tobaccocontrol-2021-056675
Author(s):  
Mateusz Zygmunt Zatoński ◽  
Catherine O Egbe ◽  
Lindsay Robertson ◽  
Anna Gilmore

BackgroundIn 2018, South Africa opened public consultations on its newly proposed tobacco control bill, resulting in substantial public debate in which a range of arguments, either in favour of or against the Bill, was advanced. These were accompanied by the recurring discussions about the annual adjustments in tobacco taxation. This study uses the concept of framing to examine the public debate in South African print media on the potential effects of the legislation, as well as tobacco tax regulations, between their proponents and detractors.MethodsA systematic search of news articles using multiple data sources identified 132 media articles published between January 2018 and September 2019 that met the inclusion criteria.ResultsSeven overarching frames were identified as characterising the media debate, with the three dominant frames being Economic, Harm reduction and vaping, and Health. The leading Economic frame consisted primarily of arguments unsupportive of tobacco control legislation. Economic arguments were promoted by tobacco industry spokespeople, trade unions, organisations of retailers, media celebrities and think tanks—several of which have been identified as front groups or third-party lobbyists for the tobacco industry.ConclusionThe dominance of economic arguments opposing tobacco control legislation risks undermining tobacco control progress. Local and global tobacco control advocates should seek to build relationships with media, as well as collate and disseminate effective counterarguments to those advanced by the industry.


2018 ◽  
Vol 4 (Supplement 2) ◽  
pp. 134s-134s
Author(s):  
M. Thoo ◽  
M.S. Abdullah ◽  
M.A. Mohd Nor ◽  
M.F. Mohamad Azmi ◽  
S. Somasundaram

Background and context: “Kiddie packs”–packs of 10 or fewer cigarettes–have been banned in Malaysia in 2010. In August 2017, however, tobacco control civil society organizations (CSOs) were informed that the tobacco industry had approached the Malaysian government on this issue, claiming that a “return” would increase the government’s tobacco tax revenue. Unfortunately, this news was not formalised and CSOs were not allowed to reveal the source. We thus could not implement direction action organizing, and the media is much less likely to respond to “smoke without fires”. Aim: To stop the return of kiddie packs. Strategy/Tactics: Through discussions on a WhatsApp group, CSOs launched a “divide and conquer” battle. After a CSO took the risk and leaked the information to media (without revealing its source), many groups built on the voice, and “smoked out” the enemy. A few CSOs tackled a different front, including using social media to gather voices, rallying the support of policymakers, other ministers, and nonhealth civil societies, and coordinating a visit to the government. Program/Policy process: After a CSO disclosed the “kiddie pack” news to the largest selling daily newspaper, many groups followed up with interviews, media statements and letters. Meantime, another CSO reached out to its network of policymakers and nonhealth CSOs for support, and sent briefing points or draft “letters to the government” with key messages that tailored to the senders´ specialty (human rights, environment, etc.) When a protobacco retailer announced it had 3200 signatures from their members, one CSO launched an online petition on its Facebook page, shared the effects of kiddie packs on adolescents, and gathered 10 times the signature within a month. The final effort was a visit to the government - a tactic used by the e-cigarette industry previously - to submit the signatures and statement. Outcomes: The “leak” resulted in a front page coverage, allowing the Health Minister to state his views, and other CSOs to use it as a platform to voice their protest. It was also publicised in mainstream as well as online news in different languages. Within two weeks, the tobacco industry finally revealed its intention, and coordinated its media responses through its supporters. Each of these responses were met - point by point–by CSOs, resulting in at least 20 published “letters”. Nearly 40,400 (online and offline) signatures were gathered, representing 57 CSOs. To date, kiddie packs have not made a “return”. What was learned: Instant messaging applications and social media tools can replace meetings and on-the-ground efforts, especially when CSOs lack funds, time, and human resources. Also, great campaigns should consist of general (e.g., writing to the media) as well as specialized (social media, networking with policymakers) efforts. This allows different CSOs to focus their strengths, avoid redundant tasks or “working in silos”, and have every contribution count.


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