Tobacco companies manipulate prices to subvert tax rises
Major tobacco firms have been manipulating the cost of cigarettes for over a decade in order to subvert government anti-smoking initiatives, according to research by King’s College London and the University of Bath. The scientists found that the practice of “over-shifting”, or using premium products to subsidise cheaper ones, meant that, by switching brands, smokers were able to buy tobacco for the same prices they paid in 2002. By analysing data from more than 6,000 smokers, the researchers found that the gap between the cheapest and the most expensive brands had almost doubled between that date and 2014.
Big tobacco companies have been manipulating the prices of cigarettes for more than a decade to undermine government attempts to deter people from smoking, research suggests.

A study published in the journal Nicotine & Tobacco Research has found that the increasing availability of cheap tobacco has hampered public health efforts to discourage smoking, the leading cause of preventable death.

Scientists at King’s College London and the University of Bath analysed data from more than 6,000 smokers to look at the price they paid for tobacco between 2002 and 2014.

They found that, by switching brands, smokers could buy tobacco in shops at the same prices they paid in 2002. The range between the cheapest and most expensive brands almost doubled over the 12 years. In 2002 it was 12p per cigarette but by 2014 this had increased to 23p. In 2014, the most expensive pack of 20 factory-made cigarettes cost about £10, whereas the cheapest pack cost only £5.33. “Our research suggests that tobacco companies are able to meet tax requirements and keep cheap products available by markedly increasing prices on premium brands,” says the study’s co-author, Rosemary Hiscock from the University of Bath’s Tobacco Control Research Group.

The practice is known as “over-shifting”, whereby cigarette companies use their premium products to in effect subsidise cheaper alternatives.

The researchers argue that the widening gap between the cheapest and most expensive products is evidence that the industry deliberately introduced a wide variety of brands to meet smokers’ declining budgets.

The study also looks at the rising use of roll-your-own tobacco. The number smoking it almost doubled between 2002 and 2014 and it is particularly popular among younger people. The study found that the price increase in roll-your-own was lower than that for factory-made cigarettes. By 2014, the cheapest roll-your-own tobacco cost £1.63 for 10 grams, enough to make 20 cigarettes.

There were large increases in the tax on tobacco over the 12 years but the price of cigarettes rose only by an average of 10p per cigarette.

The researchers suggest their work provides evidence that marked tax increases have not resulted in price rises large enough to persuade smokers of the cheaper products to quit.

“Increasing tobacco prices is known to be one of the best deterrents to reduce smoking, but an increase in availability of cheaper products in conventional stores in response to this appears to be thwarting public health campaigns,” said the study’s lead author, Timea Partos of the addictions department at King’s College London.

“Policy-makers need to focus on regulating tobacco prices so that the tobacco industry is not able to undermine tax increases by offering such a wide range of cigarette prices.”

The authors suggest that the price of all types of tobacco should be equally high so that smokers are discouraged from simply switching products to reduce costs.