Abstract
BackgroundIn Britain, the tobacco industry segments cigarettes into four price categories—premium, mid-price, economy and ultra-low-price (ULP). Our previous work shows that tobacco companies have kept ULP prices stable in real terms. Roll your own (RYO) tobacco remains cheaper still.MethodsAnalysis of 2001–08 General Household Survey data to examine trends in use of these cheap products and, using logistic regression, the profile of users of these products.ResultsAmong smokers, the proportion using cheap products (economy, ULP and RYO combined) increased significantly in almost all age groups and geographic areas. Increases were most marked in under 24 year olds, 76% of whom smoked cheap cigarettes by 2008. All cheap products were more commonly used in lower socio-economic groups. Men and younger smokers were more likely to smoke RYO while women smoked economy brands. Smokers outside London and the South East of England were more likely to smoke some form of cheap tobacco even once socio-economic differences were accounted for.ConclusionsThis paper demonstrates that cheap tobacco use is increasing among young and disadvantaged smokers compromising declines in population smoking prevalence. Thus, tobacco industry pricing appears to play a key role in explaining smoking patterns and inequalities in smoking.
Highlights
Background InBritain, the tobacco industry segments cigarettes into four price categories—premium, mid-price, economy and ultra-low-price (ULP)
Tobacco industry pricing appears to play a key role in explaining smoking patterns and inequalities in smoking
European Union (EU) legislation requires Member States to have a mixed tobacco excise structure, with a proportional excise duty calculated on the maximum retail selling price, and a fixed excise duty calculated per unit of the product
Summary
Background InBritain, the tobacco industry segments cigarettes into four price categories—premium, mid-price, economy and ultra-low-price (ULP). European Union (EU) legislation requires Member States to have a mixed tobacco excise structure, with a proportional (ad valorem) excise duty calculated on the maximum retail selling price, and a fixed (specific) excise duty calculated per unit of the product. During the study period a minimum overall excise duty of 57% of the retail selling price of the price segment most in demand, known as the most popular price category (MPPC), was required. In 2002 there was an additional requirement that the overall excise duty should not be ,60 Euros per 1000 cigarettes (and 64 Euros from July 2006) for cigarettes in the MPPC.[7] The UK has some of the highest tax rates in Europe, but since 2000 tax has only increased by the rate of inflation.[7] RYO is currently taxed at half the level of manufactured cigarettes.[8]
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