Tobacco firms responsible for half of UK cigarette price rises
Tuesday 13 August 2013
Tobacco companies have driven around half of the price hike in UK cigarettes, according to experts at the University of Bath.
Researchers at the UK Centre for Tobacco Control Studies say their findings - published in the journal Tobacco Control - contradict industry claims that tax rises are solely behind increased tobacco costs.
Cancer Research UK says the research shows that the tobacco industry has been "complicit" in price rises. It also said the figures explode the myth that cigarette smuggling is fuelled by high taxes.
The researchers analysed data from market research firm Nielsen and found that almost half (48 per cent) of the total increase in cigarette prices between 2006 and 2009 was down to tobacco firms. The remaining 52 per cent was down to tax rises.
The authors also say industry claims that tax increases are responsible for increased counterfeit tobacco are misleading.
The authors wrote: "These claims are made despite evidence of the far more complex supply-side drivers of the illicit tobacco trade (including tobacco industry involvement), recent survey evidence showing that price was unrelated to levels of illicit tobacco use across Europe, and data from her Majesty's Revenue and Customs showing that levels of illicit cigarettes in the UK have declined steadily to reach an estimated nine per cent by 2010-11.
"Should the industry be genuinely concerned that price increases fuel illicit tobacco use, it would surely not increase prices to this extent, particularly given its very large profit margins, which significantly outstrip those of consumer staple companies."
Kate Alley, Cancer Research UK's tobacco policy manager, said it seemed the industry had been taking a twin-track approach by raising prices across the board while increasing the number of cheap brands available.
She added: "This research goes some way to explain how tobacco companies have continued to see an increase in profits and revenues, despite a decline in sales volumes".
"Their 'bare-knuckle fight' against standard packs stems from an uncertainty as to how they will market their 'premium brands' - at a premium price - to a new generation of potential smokers, because when you take away the 'silent-salesman' of the pack, all that's left is a product marked by a unique quality of killing half of its long-term users.
"Standard packs is about giving some of the 207,000 children that start smoking every year, one less reason to start."
Copyright Press Association 2013
- Gilmore A.B. & Reed H. The truth about cigarette price increases in Britain, Tobacco Control, DOI: 10.1136/tobaccocontrol-2013-051048
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