Tobacco Pricing

Research

Trends in the use of premium and discount cigarette brands: findings from the ITC U.S. surveys, 2002–2011
A team of researchers from the United States and Canada published an article in Tobacco Control that explored the consumption of premium and discount cigarettes among over 6,000 American adult smokers who were part of the International Tobacco Control (ITC) cohort study. Between 2002 and 2011, subjects reported smoking 260 different cigarette brands, 17% of which were premium brands and 83% of which were discount brands. Over the course of the study, the cohort was observed switching from premium to discount cigarette brands, especially after the federal excise tax increase of $0.61 that took effect in 2009. The participants’ use of premium versus discount cigarettes also varied by age and income level. The researchers predict continued increases in discount cigarette consumption and recommend stronger minimum pricing laws in order to counteract the competitive marketing among producers of discount cigarette brands. Click here to read the study abstract.

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Reports

Policy approaches to restricting tobacco product coupons and retail value-added promotions
The Tobacco Control Legal Consortium has released a comprehensive document outlining different policy options that can be used at the state and/or local level to combat the tobacco industry’s marketing tactic of price discounting. The document provides an overview of different policy types, explores legal considerations of such policies, and offers commentary on a number of case studies. Compared to other types of marketing and advertising, price discounting was relatively unregulated by the Master Settlement Agreement, and the tobacco industry has drastically increased its spending in recent years on price discounts and other promotions to offset tobacco taxes and keep tobacco products affordable to the consumer. Click here to view the full resource.

Regulating price discounting in Providence, RI (RI)
A case study from Washington University’s Center for Public Health Systems Science highlights recent tobacco control policy successes in Providence, Rhode Island. In February 2012, Providence passed restrictions on flavored tobacco products and pricing discounts that have since survived two challenges in federal court. These two policy initiatives are understood to be especially effective at reducing youth smoking. This case study is part of a larger program called the State and Community Tobacco Control (SCTC) Research Initiative, which aims to identify the impact of state and local policies in the point of sale area of tobacco marketing. Click here to read more. Click here to learn more about the SCTC Research Initiative. To download the full case study, click here.

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International

Tobacco firms lobby against move to curb black market sale of cigarettes (European Union)
Through various lobbying actions, the tobacco industry is actively opposing legislation under consideration by the European Union parliament that seeks to establish a “track-and-trace” system to cut down on cigarette smuggling. Currently in Europe, billions of cigarettes are illegally smuggled to different tax areas within and between countries. Such smuggling efforts are often connected to gangs and terrorist organizations as a revenue source for these groups. Tobacco companies are joining together in opposition of the track-and-trace proposal in favor of their own system, called Codentify. Codentify is supported by the international policing organization Interpol, which has received substantial financial contributions from Philip Morris International. Tobacco control advocates warn that a failure to pass track-and-trace legislation will permit more cigarette smuggling and greater access to cheaper and untaxed tobacco products. Click here to read more.

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