Sunday, July 30, 2017

Over-shifting Tobacco

The SOYMB blog has previously exposed how an industry that profits from providing detrimental and damaging products is still expanding its market by targeting Third World countries. Big tobacco companies have been manipulating the prices of cigarettes for more than a decade to undermine government attempts to deter people from smoking, research in the journal Nicotine & Tobacco Research. It found that the increasing availability of cheap tobacco has hampered public health efforts to discourage smoking, the leading cause of preventable death.

Looking at the price they paid for tobacco between 2002 and 2014 they found that, by switching brands, smokers could buy tobacco in shops at the same prices they paid in 2002. The range between the cheapest and most expensive brands almost doubled over the 12 years. In 2002 it was 12p per cigarette but by 2014 this had increased to 23p. In 2014, the most expensive pack of 20 factory-made cigarettes cost about £10, whereas the cheapest pack cost only £5.33. “Our research suggests that tobacco companies are able to meet tax requirements and keep cheap products available by markedly increasing prices on premium brands,” says the study’s co-author, Rosemary Hiscock from the University of Bath’s Tobacco Control Research GroupThe practice is known as “over-shifting”, whereby cigarette companies use their premium products to in effect subsidise cheaper alternatives.

The researchers argue that the widening gap between the cheapest and most expensive products is evidence that the industry deliberately introduced a wide variety of brands to meet smokers’ declining budgets.

The study also looks at the rising use of roll-your-own tobacco. The number smoking it almost doubled between 2002 and 2014 and it is particularly popular among younger people. The study found that the price increase in roll-your-own was lower than that for factory-made cigarettes. By 2014, the cheapest roll-your-own tobacco cost £1.63 for 10 grams, enough to make 20 cigarettes.

The authors suggest that the price of all types of tobacco should be equally high so that smokers are discouraged from simply switching products to reduce costs.


Anonymous said...

I'm not a fan of regressive taxes that unfairly punish the poor.

ajohnstone said...

The real question to ask is if an industry making money from a product so hazardous to people's health any worse than other businesses within capitalism. Would we permit asbestos to be sold in corner-shops?

I too think that taxes is no way to end this trade as the article reveals how such can be easily minimised and avoided. Nor would simple prohibition solve the addiction.