Tobacco price rises? Don’t put all the blame on the Chancellor

Monday 12 August 2013

Tobacco industry claims that high prices for cigarettes are due to tax increases are exposed as false today, in an online article for Tobacco Control by economist Howard Reed and Professor Anna Gilmore of the University of Bath and the UK Centre for Tobacco Control Studies. From 2006 to 2009, almost half the total increase in price across all cigarette price bands was due to the tobacco companies raising their own prices, and for all but the very cheapest brands the tobacco company share of the increase was about 55%.

Commenting, Action on Smoking and Health research manager Amanda Sandford said:

“The tobacco industry has spent years complaining that tobacco tax rises – the single most effective means to encourage people to quit smoking – will lead to an increase in illicit trade. But this analysis makes it clear that the companies have been hiking their own prices as fast as they can. Clearly, they are not as worried about the effect of price rises on illicit trade as they want the public to think. And of course, the truth about illicit cigarettes in the UK is that the numbers have more than halved since their peak in 2000. Now the industry is pretending that standardised packs would also increase illicit trade. Nothing they say on this subject can be believed.”



Notes and Links
[1] The truth about cigarette price increases in Britain. Tobacco Control online
doi 10.1136/tobaccocontrol-2013-051048

HMRC statistics show that smuggled cigarettes accounted for an estimated 9% share of the total market in 2010-11, down from 21% in 2000-01.