Tobacco Pricing

Reports

The effect of the 2012 federal transportation reauthorization bill on state and local regulation of roll your own tobacco retailers
The Tobacco Control Legal Consortium has released a fact sheet that answers questions about how the 2012 Federal Transportation Reauthorization Bill affects state and local regulation of roll your own (RYO) tobacco retailers. It answers questions such as what the bill has to do with tobacco, and the significance of changing the definition of stores with RYO tobacco machines to manufacturers in accomplishing the public health goal of raising tobacco prices. Click here to access this fact sheet. The Legal Consortium has also updated the related Tips & Tools guide, Regulating Roll Your Own Tobacco Machines, and the fact sheet, Roll Your Own Tobacco Machines: An Overview.

A new light for roll your own tobacco fans
Roll your own (RYO) tobacco retailers claim to have found a legal loophole in the new federal tax rules for RYO tobacco. In recent years, RYO tobacco has gained popularity due to federal and state tobacco tax increases on cigarettes that left loose tobacco taxed at a cheaper rate than cigarettes. In response to increased sales in RYO tobacco, the federal government instated a law that required RYO tobacco and name brand cigarettes to be taxed at the same rate. RYO tobacco retailers are now circumventing this new policy by creating smoking clubs, where customers pay a small fee to join. The RYO tobacco machines are owned by these smoking clubs, and not the store or retailer, which retailers believe will allow them to skirt the federal regulation. The club rents the machines to members, who are able to purchase the loose tobacco and roll it themselves. Tobacco control organizations question the legitimacy of these clubs, and consider them to be a means of dodging taxes. Click here to read more.

Cigarette sales fall as consumption hits record low; tax credited (MS)
Increases in the cost of cigarettes have reduced the rates of cigarette consumption in Mississippi. According to the Tax Burden Report on Tobacco from 2011, consumption of cigarettes is the lowest ever reported at 67.9 packs per person. Between 2008 and 2011, cigarette pack sales have decreased in the state by 26%. Additionally, during that same time period, revenue from cigarette taxes tripled. This increase in revenue is attributed to the federal and state tobacco tax increases in 2009. While higher cigarette taxes explain reduced cigarette sales and higher revenue, the prevalence of smoking in the state has not changed. Continued increases in revenue were also explained by consumers purchasing other, less expensive tobacco products such as cigars, smokeless tobacco, e-cigarettes and chewing tobacco. The prevalence of smoking among young adults has also decreased in the state. Click here to read more. Click here to access the Cigarette Consumption and Cigarette Tax Revenue fact sheet. For more tobacco control data from Mississippi, click here.

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State Policy

Michigan cigar smokers may get a price break; American Cancer Society objects (MI)
A Michigan Senate bill that caps cigar taxes at 50 cents per cigar was presented to the governor for consideration. The existing state tax on cigars, non-cigarette smoking tobacco, and smokeless tobacco is 32% of the wholesale price. Adding this cap would keep cigar taxes lower than any other tobacco product in the state. The American Cancer Society and American Heart Association oppose this bill stating that the cap would make cigars more affordable for kids, thus increasing the likelihood of kids experimenting with cigars. Lower prices would also reduce the cost incentive for adults to quit. Supporters of this bill are hoping to keep consumers purchasing tobacco in the state, as opposed to traveling to neighboring states with cheaper prices on tobacco products. Click here to read more.

Missouri governor candidate forum (MO)
Neither candidate running for governor in Missouri supports the cigarette tax increase that will be on the ballot in November. The tax increase will increase the state’s cigarette tax from 17 cents, the lowest in the country, to 90 cents. Revenue generated from the increase would go to public schools, higher education, and tobacco cessation programs. In a recent debate between the candidates, both stated that they do not agree that increasing the state cigarette tax is a good way to acquire revenue for schools. Click here to read more. Click here to read more details about the ballot initiative, Proposition B.

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International

Tobacco tax revenue falls by $341m (Australia)
The recent final budget outcome report for 2011/2012 shows that the Australian government’s tobacco excise tax revenue is less than the estimated amount. The tobacco excise tax revenue was expected to be $5.79 billion, but according to the latest report, the actual amount collected was $5.45 billion. In order to protect the public’s health from the negative effects of smoking, the Australian government has put several tobacco control actions in place such as a tobacco tax increase, a plain packaging mandate for cigarette packages, and a limit to the amount of duty-free cigarettes that can be brought into the country. These new tobacco control policies could explain why the revenue has been lower than anticipated. Click here to read more.

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