Impact of the Spanish smoke-free laws on cigarette sales by brands, 2000-2021: Evidence from a club convergence approach.

Abstract

In January 2006, the Spanish government enacted a tobacco control law that banned the advertising, promotion and sponsorship of tobacco. In January 2011, further legislation on this matter was adopted to provide a more restrictive specification of the ban. In this study, we analyze the effect produced on cigarette sales by these two prohibitions. We address this problem using a cluster time-series analysis to test whether the sales of cigarettes by brands have been homogenized with the prohibition of advertising, promotion, and sponsorship. The data source used was the official data on legal sales of cigarettes by brands in Spain, from January 2005 to December 2021 (excluding the Canary Islands and the Autonomous Communities of the cities of Ceuta and Melilla). To achieve our objective, we used log(t) test statistics to check if there is global convergence in the three selected periods according to the regulatory changes that have occurred in Spain (2005-2021, 2005-2010 and 2011-2021). Second, once absolute convergence is rejected, we applied a clustering algorithm to test for the existence of subgroup convergence. The cigarette brands that have been marketed during the period 2005-2021 (n=40), can only be grouped into three groups according to the behavior of their sales. When we focus on the period 2005-2010 (n=74), cigarette brands are grouped into five groups according to their sales behavior. Finally, the cigarette brands marketed during the period 2011-2021 (n=67) are grouped into three groups according to the temporal evolution of their sales. These results suggest a greater homogenization of cigarette sales after the application of the law of January 2011. Act 42/2010 (total ban on tobacco advertising, promotion, and sponsorship actions) was associated with greater homogenization of cigarette sales than the application of Act 28/2005 (partial ban). This finding supports what is established in the previous literature that indicates that Act 42/2010 provided a more restrictive specification of the ban than Act 28/2005.