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Prices

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Call To Action

Continuing to increase the price of tobacco products is a cornerstone of tobacco control.

Average annual percent change in real price on the most popular price category of cigarettes; 2008–2012

Whether a person decides to buy a tobacco product is greatly dependent on the price of the product and the amount of money in a person’s pocket. Tobacco prices are central to industry marketing strategies, and it is the tobacco industry that sets the prices of its tobacco products. Cigarettes are a largely uniform product, easily manufactured at low cost on a global scale. Through pricing strategies, the tobacco industry regulates its sales volumes and decides which products and brands will be perceived as “premium” and which will be “economy” brands.

Cheap brands help the industry broaden its customer base because these products are more affordable to youth. Conversely, by increasing the prices of its products, the industry can wring more money from its addicted customers. When regulations successfully increase the price of one product, such as cigarettes, the industry is able to set the prices of other tobacco products to entice consumers to switch products and keep more people buying their goods.

Prices of tobacco products are of great interest to the public health community because they play such a pivotal role in people’s decisions to use tobacco. The overwhelming body of economic evidence confirms that a 10% increase in cigarette price causes the consumption of cigarettes to fall between 2% and 8%. Roughly half of this fall comes from current smokers cutting back on the number of cigarettes they smoke, while the other half results from fewer youths starting to smoke as well as current smokers quitting. Additionally, less variation in the prices of all tobacco products can keep people from switching between products to avoid price increases.

Many countries have successfully used tax policies to regulate the price of cigarette products (see Taxes). Policies beyond excise taxes also directly and indirectly influence tobacco product prices, including bans on discounting and price promotions, minimum retail prices, and minimum package sizes.

Price Gap

Price difference between a pack of the most popular and the cheapest brand of cigarettes; 2013

A large price spread provides smokers the opportunity to lessen the impact of a price increase by switching to a cheaper brand.

Resources

Methods

Figures on cigarette price gaps in 2013 from 79 countries are available in the Source Data file.

Sources

Euromonitor International. Passport: Global Market Information Database. Euromonitor International; 2014 [cited 2014 Apr 23].

Prices of different products

Average prices of equivalent amounts of different tobacco products; 20g or 20-stick Pack or 6.67 Cigarillos, in USD, 2013

Product prices vary within and among product categories. Tobacco control should always take care to raise prices across all products and places.

Resources

Methods

Figures on product prices in 2013 from 79 countries are available in the Source Data file.

Sources

Euromonitor International. Passport: Global Market Information Database. Euromonitor International; 2014 [cited 2014 Apr 23].

Opportunity-cost of cigarettes

Slices of bread and servings of rice that could be bought for the price of an average pack of cigarettes; 2013

Purchasing the necessities in life is made more difficult with each extra pack of cigarettes purchased. This matters most for people in low socioeconomic status groups, who make the greatest financial trade-offs to continue smoking.

Resources

Methods

Figures on opportunity costs to purchase cigarettes from 89 countries are available in the Source Data file.

Sources

Economist Intelligence Unit. Worldwide Cost of Living Survey. The Economist; 2013. Proprietary Subscription-Based Data.

The Whole Grains Council. What Counts as a Serving?. 2013 [cited 2014 May 9].

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Even in the United Kingdom, where almost 90% of the retail price of cigarettes is tax, half of recent price increases (6p of 12p) ARE DIRECTLY ATTRIBUTABLE TO INDUSTRY PRICING STRATEGIES, and not to the tax increases themselves.

“MY VIEWS AS TO HOW WE SHOULD PASS ON THE PRICE INCREASE in the event of an increase in the excise tax: … suggest that people stock up to avoid the price increase, and … when people … go to the store to buy more, they will be less likely to remember what they last paid.” -Myron E. Johnston, Philip Morris Researcher, 1987

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