Individualised tobacco affordability in the UK 2002-2014: findings from the International Tobacco Control Policy Evaluation Project

Options for modifying UK alcohol and tobacco tax: A rapid scoping review of the evidence over the period 1997-2018

Background

Increased taxation is recognised worldwide as one of the most effective interventions for decreasing tobacco and harmful alcohol use, with many variations of policy options available. This rapid scoping review was part of a NIHR-funded project ('SYNTAX' 16/105/26) and was undertaken during 2018 to inform interviews to be conducted with UK public health stakeholders with expertise in alcohol and tobacco pricing policy.

Methods

Objectives: To synthesise evidence and debates on current and potential alcohol and tobacco taxation options for the UK, and report on the underlying objectives, evidence of effects and mediating factors.Eligibility criteria: Peer-reviewed and grey literature; published 1997-2018; English language; UK-focused; include taxation interventions for alcohol, tobacco, or both. Sources of evidence: PubMed, Scopus, Cochrane Library, Google, stakeholder and colleague recommendations.Charting methods: Excel spreadsheet structured using PICO framework, recording source characteristics and content.

Results

Ninety-one sources qualified for inclusion: 49 alcohol, 36 tobacco, 6 both. Analysis identified four policy themes: changes to excise duty within existing tax structures, structural reforms, industry measures, and hypothecation of tax revenue for public benefits. For alcohol, policy options focused on raising the price of cheap, high-strength alcohol. For tobacco, policy options focused on raising the price of all tobacco products, especially the cheapest products, which are hand-rolling tobacco. For alcohol and tobacco, there were options such as levies that take money from the industries to help reduce the societal costs of their products. Due to the perceived social and economic importance of alcohol in contrast to tobacco, policy options also discussed supporting pubs and small breweries.

Conclusions

This review has identified a set of tax policy options for tobacco and alcohol, their objectives, evidence of effects and related mediating factors. The differences between alcohol and tobacco tax policy options and debates suggest an opportunity for cross-substance policy learning.

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INTRODUCTION

WHO advocates that financial and fiscal measures, aimed at making tobacco acquisition less affordable, are most effective, particularly in low- and middle-income countries.

PURPOSE OF RESEARCH

The objective is to analyze the application and effectiveness of the tobacco fiscal policy in Algeria in accordance with the provisions of the WHO Convention-Framework for Tobacco Control.

METHOD

Using macroeconomic data covering the period 1970-2018, we verified whether the levels, structure and evolution of tobacco taxes are oriented towards the implementation of a tobacco control tax policy. Then, we analyzed the conditions for the effectiveness of this policy and its viability through an econometric study of the price elasticity of cigarette demand, the income elasticity of cigarette demand, and the elasticity of affordable tobacco demand.

RESULTS

We have shown that in Algeria, the tobacco control fiscal Policy is not applied, it is not effective in the long term, and the conditions for its viability are not met.

CONCLUSIONS

The results of this study have led to question Article 6 of the WHO FCTC.

England SimSmoke: the impact of nicotine vaping on smoking prevalence and smoking-attributable deaths in England

BACKGROUND AND AIMS

Whereas the use of nicotine vaping products (NVPs) is widespread, their impact on smoking prevalence is controversial. This study considered the potential impact of NVPs on smoking prevalence in England.

DESIGN

Indirect simulation model. The England SimSmoke model is validated through 2012, before NVP use became more widely used by smokers. Because information on NVP-related transitions is limited, an indirect method is used; the difference in observed smoking prevalence (reflecting NVPs) is compared with a 2012-2019 counterfactual No-NVP scenario (without NVPs) to estimate the impact of NVPs on smoking and smoking-attributable deaths.

SETTING

England, 2000-2019.

PARTICIPANTS

Nationally representative sample of population.

MEASUREMENTS

England's population, mortality rates and smoking prevalence estimates from three national surveys and tobacco control policies.

FINDINGS

Between 2000 and 2012, SimSmoke projected a decline in age 18+ smoking prevalence of 23.5% in men and 27.0% in women. These projections, as well as those by specific age groups, were generally consistent with findings from the three national surveys. Comparing 2012-2019 relative reduction in age 18+ prevalence from the Annual Population Survey (males, 27.5%) with the model-predicted No-NVP reduction (males, 7.3%), the implied NVP-attributable relative reduction in adult smoking prevalence was 20.2% (95% CI, 18.8%-22.0%) for males and 20.4% (18.7%-22.2%) for females. The NVP-attributable reduction was 27.2% (22.8%-31.6%) for males and 31.7% (27.4%-36.5%) for females ages 18-24 and 18.6% (15.2%-21.8%) for males and 15.0% (11.1%-18.8%) for females ages 25-34, with similar reductions for ages 35+. The implied reduction in smoking prevalence between 2012 and 2019 equates to 165 660 (132 453-199 501) averted deaths by 2052. Other surveys yielded smaller, but relatively consistent results.

CONCLUSIONS

An indirect method of simulation modelling indicates that substantial reductions in smoking prevalence occurred in England from 2012-2019 coinciding with the growth in nicotine vaping product use.

Prices and Illicit Trade of Cigarettes in the European Union: A Cross-sectional Analysis

INTRODUCTION

Within the context of the World Health Organization Framework Convention on Tobacco Control Protocol to Eliminate Illicit Trade in Tobacco Products and the impending revision of the European Union (EU) directive on tobacco excise rules we assessed whether cigarettes price is linked to being offered illicit cigarettes.

METHODS

We combined data being offered illicit cigarettes from the 2015 Special Eurobarometer Survey on Illicit Tobacco (N = 27,672) with area-level data on Gross Domestic Product, unemployment, perceived corruption, and sharing a border with a non-European Economic Area (non-EEA) state. We used the 2015 Weighted Average Price of cigarettes (WAP), which reflects the average price of a cigarette pack in each Member State. We assessed associations between prices and illicit trade using three-level ordered regression models.

RESULTS

About 19.6% of respondents reported ever being offered illicit cigarettes, 6.4% repeatedly. In fully adjusted models WAP was not associated with being more likely to have been offered illicit market cigarettes more often (adjusted odds ratio = 1.02, 95% confidence interval: 0.91; 1.15). Sharing a border with a non-EEA Member State was associated with increased likelihood of reporting being offered illicit cigarettes more often (1.73, 1.26; 2.39).

CONCLUSION

This study found no significant association between cigarette prices and reporting being offered illicit cigarettes; sharing a border with a non-EEA Member State was linked to illicit trade. This study adds to evidence that increasing prices of cigarettes are not associated with illicit trade and that the focus should remain on securing supply chains, including through features such as independent traceability systems.

IMPLICATIONS

After adjusting for individual and regional factors, we did not identify an association between prices of cigarettes and likelihood of reporting being offered illicit cigarettes in the EU. Sharing a border with a non-EEA state, however, was associated with increased likelihood of reporting being offered illicit cigarettes more often. This study adds to evidence that increasing taxes and prices of cigarettes are not a driver of illicit trade and that policies should maintain their focus on securing the supply chain.

Trends in Social Norms Towards Smoking Between 2002 and 2015 Among Daily Smokers: Findings From the International Tobacco Control Four Country Survey (ITC 4C)

OBJECTIVE

To assess trends in daily smokers' social norms and opinions of smoking between 2002 and 2015 in Canada, the United States, the United Kingdom, and Australia.

METHOD

Data were from wave 1 (2002) to wave 9 (2013-2015) of the longitudinal International Tobacco Control Four Country Survey (Canada, the United States, the United Kingdom, Australia), involving 23 831 adult daily smokers. Generalized estimating equation logistic regression models, adjusted for demographics and survey design effects, assessed associations of wave and country with outcomes: (A) over half of five closest friends smoke, (B) agreeing that people important to you believe you should not smoke, (C) agreeing that society disapproves of smoking, and (D) negative opinion of smoking.

RESULTS

Between 2002 and 2015, adjusting for covariates, (A) over half of five closest friends smoke did not change (56% vs. 55%; adjusted odds ratio [AOR] = 0.95 [95% Confidence Interval = 0.85-1.07]), (B) agreeing that people important to you believe you should not smoke generally decreased (89% vs. 82%; AOR = 0.54 [0.46-0.64]) despite an increase around 2006-2007, (C) agreeing that society disapproves of smoking increased between 2002 and 2006-2007 (83% vs. 87%; AOR = 1.38 [1.24-1.54]) then decreased until 2013-2015 (78%; AOR = 0.74 [0.63-0.88]), and (D) negative opinion of smoking decreased between 2002 and 2010-2011 (54% vs. 49%; AOR = 0.83 [0.75-0.91]) despite an increase around 2005-2006 and at the final wave (2013-2015). Except friend smoking, Canada had the greatest, and the United Kingdom the lowest, antismoking social norms and opinions.

CONCLUSIONS

Except friend smoking and opinion of smoking, daily smokers' social norms became less antismoking between 2002 and 2015 despite increases around 2006-2007. Several potential explanations are discussed yet remain undetermined.

IMPLICATIONS

Increasingly comprehensive tobacco control policies alongside decreasing smoking prevalence in Canada, the United States, the United Kingdom, and Australia have led to the assumption that smoking has become denormalized in these countries. Absent from the literature is any formal assessment of social norms towards smoking over time. Contrary to our hypotheses, this study found that the injunctive social norms of daily smokers became less antismoking between 2002 and 2015, despite increases around 2006-2007. There was no change over time in the proportion of daily smokers who report that over half of their five closest friends smoke.

Impact of tobacco tax increases and industry pricing on smoking behaviours and inequalities: a mixed-methods study

Background

Increasing tobacco prices through taxation is very effective for reducing smoking prevalence and inequalities. For optimum effect, understanding how the tobacco industry and smokers respond is essential. Tobacco taxation changes occurred in the UK over the study period, including annual increases, a shift in structure from ad valorem to specific taxation and relatively higher increases on roll-your-own tobacco than on factory-made cigarettes.

Objectives

Understanding tobacco industry pricing strategies in response to tax changes and the impact of tax on smokers’ behaviour, including tax evasion and avoidance, as well as the effect on smoking inequalities. Synthesising findings to inform how taxation can be improved as a public health intervention.

Design

Qualitative analysis and evidence synthesis (commercial and Nielsen data) and longitudinal and aggregate cross-sectional analyses (International Tobacco Control Policy Evaluation Project data).

Setting

The UK, from 2002 to 2016.

Data sources and participants

Data were from the tobacco industry commercial literature and retail tobacco sales data (Nielsen, New York, NY, USA). Participants were a longitudinal cohort (with replenishment) of smokers and ex-smokers from 10 surveys of the International Tobacco Control Policy Evaluation Project (around 1500 participants per survey).

Main outcome measures

(1) Tobacco industry pricing strategies, (2) sales volumes and prices by segments over time and (3) smokers’ behaviours, including products purchased, sources, brands, consumption, quit attempts, success and sociodemographic differences.

Review methods

Tobacco industry commercial literature was searched for mentions of tobacco products and price segments, with 517 articles extracted.

Results

The tobacco industry increased prices on top of tax increases (overshifting), particularly on premium products, and, recently, the tobacco industry overshifted more on cheap roll-your-own tobacco than on factory-made cigarettes. Increasingly, price rises were from industry revenue generation rather than tax. The tobacco industry raised prices gradually to soften impact; this was less possible with larger tax increases. Budget measures to reduce cheap product availability failed due to new cheap factory-made products, price marking and small packs. In 2014, smokers could buy factory-made (roll-your-own tobacco) cigarettes at real prices similar to 2002. Exclusive roll-your-own tobacco and mixed factory-made cigarettes and roll-your-own tobacco use increased, whereas exclusive factory-made cigarette use decreased, alongside increased cheap product use, rather than quitting. Quitting behaviours were associated with higher taxes. Smokers consumed fewer factory-made cigarettes and reduced roll-your-own tobacco weight over time. Apparent illicit purchasing did not increase. Disadvantaged and dependent smokers struggled with tobacco affordability and were more likely to smoke cheaper products, but disadvantage did not affect quit success.

Limitations

Different for each data set; triangulation increased confidence.

Conclusions

The tobacco industry overshifted taxes and increased revenues, even when tax increases were high. Therefore, tobacco taxes can be further increased to reduce price differentials and recoup public health costs. Government strategies on illicit tobacco appear effective. Large, sudden tax increases would reduce the industry’s ability to manipulate prices, decrease affordability and increase quitting behaviours. More disadvantaged, and dependent, smokers need more help with quitting.

Future work

Assessing the impact of tax changes made since 2014; changing how tax changes are introduced (e.g. sudden intermittent or smaller continuous); and tax changes on tobacco initiation.

Funding

This project was funded by the National Institute for Health Research (NIHR) Public Health Research programme and will be published in full in Public Health Research; Vol. 8, No. 6. See the NIHR Journals Library website for further project information.

Smokers' strategies across social grades to minimise the cost of smoking in a period with annual tax increases: evidence from a national survey in England

OBJECTIVES

To assess associations between smokers' strategies to minimise how much their smoking costs and cost of smoking among smokers across three social grades during a period of annual tax increases in England.

DESIGN

Repeat cross-sectional.

SETTING

England, May 2012-December 2016.

PARTICIPANTS

16 967 adult smokers in 56 monthly surveys with nationally representative samples.

MEASURES AND ANALYSIS

Weighted generalised additive models assessed associations between four cost-minimising strategies (factory-made and roll-your-own (RYO) cigarette consumption levels, illicit and cross-border purchases) and cost of smoking (£/week). We adjusted for inflation rate, age, gender and secular and seasonal trends.

RESULTS

Cost of smoking did not increase above the rate of inflation. Factory-made cigarette consumption decreased, while proportion of RYO and, to a much lesser extent, illicit and cross-border purchases increased. These trends were only evident in lowest social grade. Cost of smoking was 12.99% lower with consumption of 10 fewer factory-made cigarettes (95% CI -13.18 to -12.80) and 5.86% lower with consumption of 10 fewer RYO cigarettes (95% CI -5.66 to -6.06). Consumption levels accounted for 60% of variance in cost. Cross-border and illicit tobacco purchases were associated with 9.64% (95% CI -12.94 to -6.33) and 9.47% (95% CI -12.74 to -6.20) lower costs, respectively, but due to low prevalence, accounted for only 0.2% of variation. Associations were similar across social grades, although weaker for illicit and cross-border purchases and stronger for consumption in higher social grades compared with lower social grades.

CONCLUSION

During a period of annual tax increases, the weekly cost of smoking did not increase above inflation. Cost-minimising strategies increased, especially among more disadvantaged smokers. Reducing cigarette consumption and switching to RYO tobacco explained a large part of cost variation, while use of illicit and cross-border purchasing played only a minor role.

Exploiting a low tax system: non-tax-induced cigarette price increases in Taiwan 2011-2016

Introduction

This study aims to analyse the non-tax-induced price increasing strategies adopted by tobacco industry in Taiwan, a high-income country with comprehensive tobacco control policies but low tobacco taxes and a declining cigarette market.

Methods

Using governmental tax, price and inflation data, we analysed cigarette sales volume, affordability, affordability elasticity of demand, market share, pricing and net revenue of the top five tobacco companies in Taiwan from 2011 to 2016 when no tax increases occurred.

Results

Total revenue after tax grew significantly for all the major transnational tobacco companies between 2011 and 2016 at the expense of the state-owned Taiwan Tobacco and Liquor Corporation. In terms of market share, Japan Tobacco (JT) was the leading company, despite experiencing a small decline, while British American Tobacco and Imperial Brands remained stable, and Philip Morris International increased from 4.7% to 7.0%. JT adopted the most effective pricing strategy by increasing the real price of its two most popular brands (Mevius and Mi-Ne) and, at the same time, doubling the sales of its cheaper and less popular brand Winston by leaving its nominal retail price unaltered.

Conclusions

Low and unchanged tobacco taxes enable tobacco companies to use aggressive pricing and segmentation strategies to increase the real price of cigarettes without making them less affordable while simultaneously maintaining customers’ loyalty. It is crucial to continue monitoring the industry’s pricing strategies and to regularly increase taxes to promote public health and to prevent tobacco industry from profiting at the expense of government revenues.