OFT investigation highlights tobacco industry hypocrisy



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Friday 25 April 2008

Today’s allegation by the Office of Fair Trading that British tobacco companies have been involved in a price cartel follows a recent study conducted for ASH showing that the tobacco prices have risen considerably higher than inflation in recent years due to tobacco industry price increases. [1] For example, in the years under investigation from financial year 2000-03 the Retail Price Index (on which the tobacco tax increase is based) increased by 6.46% while the retail price of cigarettes overall increased by 12.49%. Tax increases on tobacco over these years were only at the rate of inflation.

Deborah Arnott, Director of the health campaigning charity ASH, said:

“The hypocrisy of the industry knows no bounds. While complaining bitterly about tax increases the manufacturers have been raising the price of cigarettes to fill their own coffers while hiding behind the screen of tax rises. While we approve of tobacco prices being high, the profits should go to the Government for redistribution into the health service, not to the tobacco industry. ”

Contrary to tobacco industry propaganda, there is widespread public support for raising tobacco taxes above the rate of inflation, though there is no evidence of support for fuelling industry profits. According to a recent poll [3] 61% of respondents favoured a rise in tobacco tax above the rate of inflation. Furthermore, 66% of respondents said they would support a tax rise of 20p per pack if the money raised was used to prevent young people from taking up smoking and to help people stop smoking.
ENDS

Notes and links:
Notes to Editors:
[1] Research conducted by health economist Professor Joy Townsend on behalf of ASH. Unpublished. 2008.

[2] The Tobacco Manufacturers’ Association which represents the UK tobacco companies continues to argue for a freeze on tobacco duties. In a letter sent to MPs about this year’s Budget, the TMA said it was asking the Chancellor to freeze the level of tobacco duty.

[3] The survey, conducted by YouGov Plc for Action on Smoking and Health, was carried out between 20th and 22nd February 2008. Total sample size was 3,329 adults. The results have been weighted and are representative of all British adults (aged 18 ). The findings will be presented at a tobacco control conference to be held on Monday 28 April in Cardiff organised by ASH Wales.