The tobacco industry has bumped up prices for its products beyond that required by tax changes, even when tax rises were large and unexpected, reveal the published in the BMJ journal Tobacco Control funded by the National Institute for Health 69色情片.
鈥楻oll your own鈥 tobacco had the highest industry driven price rises, despite higher levels of illicit trade for these products. This refutes industry鈥檚 stated concerns that price rises fuel the illicit tobacco trade 鈳 an argument they have used to lobby against tax hikes, say the researchers.
Before 2010, in Britain and Ireland, the tobacco industry regularly increased cigarette prices over and above the level required by tax rises, accounting for almost 50% of the total price increase in the UK. Since then, manufactured cigarette sales have fallen by 17%, while sales of cheaper 鈥榬oll your own鈥 have increased by 46%.
But the government has been reluctant to increase taxes further on 鈥榬oll your own鈥 for fear of pushing smokers towards the illegal market, which is already larger than that for manufactured cigarettes.
To explore the extent to which price rises since 2010 have been due to tax increases or industry strategies to boost profits, the researchers at the University of Bath and King鈥檚 College London analysed UK data on inflation, tax rates, and sales of 鈥榬oll your own鈥 tobacco and manufactured cigarettes between 2010 and 2015.
Between 2010-12 when there were large and unexpected tax increases, industry-driven price changes were small, accounting for 16% and 20% respectively of the price increases in manufactured and 鈥榬oll your own鈥 tobacco. Changes were similar across pack sizes and price segment.
But from 2013-15, when tax increases were smaller and planned, almost a third (33%) of the price increase for manufactured cigarettes was industry-driven, rising to nearly half (48%) of the price hike for 鈥榬oll your own鈥 tobacco.
The authors of the new study suggest: 鈥楾his implies that the industry does not believe [its] own argument that higher taxes/prices encourage illicit tobacco purchasing. This is further supported by a higher proportion of the total price increase being attributable to industry revenue increases for 鈥榬oll your own鈥, despite the illicit market share for 鈥榬oll your own鈥 being substantially higher.鈥
The findings also suggest that there is still scope to further increase taxes, even in a high tax and high price environment like the UK. Based on previous related research they suggest that such increases should be sudden and unexpected for maximum impact in changing behaviours.
from Bath's School of Management explains: 鈥淚f the tobacco industry was really concerned about higher prices driving the market for illicit tobacco, they would only increase their prices whenever they were forced to do so by higher taxes.
鈥淏ut the results of our paper show that the industry has a track record of going beyond tax rises when it comes to price increases in order to enhance their profits.鈥
Co-author from King鈥檚 College London, adds: 鈥淭he actual pricing of products by tobacco companies goes against the industry鈥檚 own well-worn arguments that higher prices 鈥 caused by taxation - risk pushing people towards illicit tobacco.鈥
The researchers have previously argued that taxation on tobacco is the 鈥榖est weapon鈥 against smoking and in reducing the public health burden it causes.
The latest paper 鈥楿K tobacco price increases: driven by industry or public health鈥 is published Friday 26 July in the BMJ journal Tobacco Control.