How the tobacco industry deals with government attempts to stop people who smoke



ANDT is thought that two out of three smokers want to kick off their deadly habit and for good reason – the same proportion of them is supposed to die prematurely due to smoking. Worldwide, the habit of killing more than 6 million people a year.

Still, the termination of work is notoriously difficult. Tobacco smoking is the addictive habit that the UK Royal College of Physicians compared itself to addiction to heroin and cocaine.

But that does not mean there's nothing we can do. Evidence suggests that an increase in tobacco tax is the most effective means of reducing tobacco use. These taxes, recommended by the World Health Organization and the World Bank, increase the price of tobacco products in stores and reduce their affordability – a situation that helps smokers to leave, and discourages them first.

Taxation is particularly important because lower-income smokers are less likely to respond to many other anti-tobacco campaigns and regulations to encourage exit. However, such smokers, including many young people, are most vulnerable to price increases.

If addiction is not enough, the additional challenge for digging habit is that tobacco companies simply do not want smokers to leave. They do not want to lose their customers and the substantial profits they provide.

It is not surprising that the tobacco industry has a well-documented history of undermining regulations that seek to control the use and sale of tobacco for the benefit of public health. For example, the largest tobacco companies continue to sell cigarettes to children all over the world, even though they say they will not, and often in places where advertising is forbidden. In the United Kingdom, where tobacco advertising is forbidden, Philip Morris International effectively circumvents the ban on his recently launched "stop smoking" campaign, which in fact continues to promote its tobacco products.

Pay high prices

While many of these tactics are obvious, some are harder to recognize. Our latest research reveals another – in what way the price strategy of tobacco products in the UK minimizes the intended effects of increasing taxes on tobacco products on public health.

Tobacco companies offer a number of cheaper products that help people smoke (and attract new consumers to get started), and at the same time offer a set of higher priced brands that really make money for those who are unable or unwilling to quit.

When taxes on tobacco are increased, they play with their prices to undermine the impact of the increase in smoking taxes. Absorbing tax increases, especially at cheapest brands, are delaying and jeopardizing the intended increase in tobacco prices. In this way, price increases are gradually being applied to their brand portfolio to ensure that smokers never face a sudden drop in prices when the government raises taxes.

Further tactics adopted by the industry include shrinkflation – cutting the number of cigarettes in a pack to disguise price rises and prevent the cost of a packet of tobacco being tipped over certain psychological levels.

Reducing the number of cigarettes in a pack from 20 to 19, 18 or even 17, while keeping the price stable means the higher cost per cigarette isn’t immediately obvious to most smokers – and the producer can make greater profits.

The industry also used price marked packaging to limit the ability of retailers to increase their small markup on tobacco sales as a further way of keeping tobacco cheap. Sales of 10-cigarette packs increased and very small packs of loose tobacco (10g or less) were introduced. These small packets appeal to the most price sensitive smokers as they cost less to buy.

Such tactics and small packs have recently been banned in the UK with the introduction of standardised packaging (where tobacco has to be sold in a standardised format with drab packaging) but are still available elsewhere. The UK has also introduced a new minimum excise tax which puts the average price at over £10 for a packet of 20 cigarettes stopping the sale of ultra-cheap mainstream tobacco products.

Ultimately the tobacco industry wouldn’t be manipulating price if it wasn’t so effective in ensuring young people take up smoking and in preventing existing smokers from quitting. So what more can we do?

Stubbing it out

Further restricting industry use of pricing tactics would be a good option. Companies could be limited in the number of brands and brands variants they sell to cut down on the range of prices on offer, and in the number of times they can change prices in order to remove their ability to smooth prices and directly undermine the public health benefits of tax increases.

There is even a case for directly regulating tobacco prices in the same way that prices for public utility services, such as water and electricity are often determined by independent government agencies. Public utilities are important services, which is why the government looks to protect the public from company pricing choices – but then tobacco is a very addictive and deadly product where price matters too.

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Meanwhile, Bloomberg Philanthropies recently announced a $20m (£16m) investment to create Stop (Stopping Tobacco Organisations and Products) – a global tobacco industry watchdog to help expose more of these practices. The Tobacco Control Research Group at the University of Bath is one of three partners funded to lead this initiative.

The public can cannot afford to let the industry operate under the radar when the product they make kills two out of three long term users. This new partnership will serve as a necessary watchdog to expose their deadly tactics.

Anna Gilmore is a professor of public health and director of the Tobacco Control Research Group, J Robert Branston is a senior lecturer in business economics and Rosemary Hiscock is a research associate at the University of Bath. This article first appeared on The Conversation (theconversation.com)


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