Addressing lower-priced cigarette products through three-pronged comprehensive regulation on excise taxes, minimum price policies and restrictions on price promotions

Causal effects of point-of-sale cigarette promotions and subjective social status on cigarette craving: a randomised within-person experiment

BACKGROUND

Cigarette smoking continues to be a leading cause of preventable deaths in the USA, in part because the USA has not adopted the WHO Framework Convention on Tobacco Control. One way the tobacco industry counteracts tobacco control policies is by heavily advertising cigarettes at the point of sale in retailers (eg, at the cash register) and by offering discounts on cigarettes.

DESIGN

A within-subject experimental design with adults who smoke cigarettes daily (n=281) investigated whether: (1) exposure to images of cigarette promotions in an online experiment is associated with greater cigarette craving relative to viewing images of non-smoking cues, and (2) if exposure to images of point-of-sale cigarette promotions with a discount (vs without) increases cigarette craving. The study also examined how participants' subjective social status (compared with others in the USA) relates to cigarette craving after exposure to images of cigarette promotions with and without a discount.

RESULTS

In an online experiment, exposure to images of smoking cues, including point-of-sale cigarette promotions, elicited greater craving relative to non-smoking cues (all p<0.001). In addition, images of promotions with a discount elicited higher levels of craving compared with those without a discount (b=0.09, p=0.001). Although participants with a higher (vs lower) subjective social status craved cigarettes less overall (b=-0.12, p=0.012), there was no difference in their craving between images of promotions with and without a discount, while craving was higher for images of promotions with a discount than without for participants with higher subjective social status (b=0.06, p=0.021).

CONCLUSION

Viewing images of point-of-sale cigarette promotions can causally increase cravings to smoke, which may also apply to real-world retail settings that display cigarette promotions. Restricting point-of-sale promotions generally, and discounts specifically, could help reduce cigarette smoking and address tobacco use disparities in the USA.

Effect of a minimum floor price law for tobacco products on tobacco sales in Oakland, California, USA: a synthetic difference-in-differences analysis

BACKGROUND

In May 2020, Oakland became the most populous city in California to implement a minimum floor price law (MFPL), requiring tobacco retailers to sell cigarettes and cigars at $8 or more per pack/package. Policy enforcement began in August 2020.

METHODS

We estimated changes in cigarette and cigar prices and unit sales for Oakland versus a matched comparator during the first 20 months following MFPL implementation using a synthetic difference-in-differences approach. We estimated outcome changes overall and by lower-priced (<$8) versus higher-priced (≥$8) segments based on pre-MFPL prices. We also assessed retailer compliance with the MFPL. We further estimated cross-border shopping as a means of price increase avoidance and substitution to electronic nicotine delivery systems (ENDS) and nicotine replacement therapy (NRT) products as alternative consumer responses to the MFPL.

RESULTS

Retailer compliance was high for cigarettes (97.5%) but extremely low for cigars (7.4%). Lower-priced cigarettes in Oakland exhibited: increased median price per pack of 9.0%, a decline in mean monthly sales of 25.2%, and no evidence of significant cross-border shopping (-1.2%) following MFPL enforcement. Lower-priced cigars in Oakland experienced no price change, yet a large sales decline post-enforcement (-58.8%), with a partially-offsetting increase in cross-border shopping (11.0%) post-enforcement. We observed no significant product substitution to higher-priced cigarettes or cigars nor to ENDS or NRT products.

CONCLUSIONS

Oakland's MFPL produced an aggregate decline in cigarette sales of 15%. MFPLs hold promise as a complement to tobacco taxation for reducing tobacco use, especially in localities that pre-empt local tobacco taxation.

How cigarette excise tax pass-through to prices responds to the uptake and evolution of e-cigarettes (ECs)

BACKGROUND

How excise taxes are passed through to prices determines whether tax policies will be effective in changing smoking behaviours. Though previous literature has documented that cigarette taxes are overly shifted to prices, there is limited evidence on how cigarette tax pass-through to prices is affected by the uptake and evolution of e-cigarettes (ECs) in the US market.

OBJECTIVE

This study investigates how cigarette excise tax pass-through rate varied by price levels (the 25th, 50th, and 75th percentile prices) and the uptake and evolution of ECs.

METHODS

Tax pass-through rates were assessed using ordinary least squares regressions while controlling for state, year and month fixed effects. Different trends were then tested for the pre-EC uptake era (2006-2011), EC uptake era (2012-2016) and the evolution of nicotine salt-based ECs era (2017 and later).

FINDINGS

Cigarette excise taxes were fully shifted to the 25th and 50th percentile prices and overly shifted to the 75th percentile prices at a 1:1.1 rate. While cigarette excise taxes had a continuous impact on raising prices, the tax pass-through rates were lower for lower priced cigarettes, and states imposed lower taxes.

CONCLUSIONS

Continuing to raise cigarette taxes may be needed to create financial incentives to encourage people who smoke to switch to ECs. In addition, continuing to raise cigarette taxes and additional pricing policies such as price promotion restrictions are needed to increase retail prices and reduce price minimisation opportunities.

Recommendations to advance equity in tobacco control

Reducing racial and socioeconomic inequities in smoking has been declared a priority for tobacco control in the USA for several decades. Yet despite the rhetoric, these inequities persist and some have actually worsened over time. Although tobacco companies have targeted racially and ethnically diverse and lower-income tobacco users, which substantially contributes to these disparities, less attention has been given to the role of individuals and organisations within the tobacco control movement who have allowed progress in eliminating disparities to stagnate. We examine the failure of tobacco control professionals to ensure the widespread adoption of equity-focused tobacco control strategies. Review of major US tobacco control reports found that the focus on equity often stops after describing inequities in tobacco use. We suggest ways to advance equity in tobacco control in the USA. These recommendations fall across five categories: surveillance, interventions, funding, accountability and addressing root causes. Policy interventions that will have a pro-equity impact on smoking and related disease should be prioritised. Funding should be designated to tobacco control activities focused on eliminating racial and socioeconomic inequities in smoking, and tobacco control programmes should be held accountable for meeting equity-related goals.

The longitudinal association between coupon receipt and established cigarette smoking initiation among young adults in USA

INTRODUCTION

Tobacco companies frequently distribute coupons for their products. This marketing tactic may be particularly effective among young adults, who tend to be especially price-sensitive. Young adulthood is also a stage during which many individuals initiate established cigarette smoking and are especially vulnerable to the effects of tobacco marketing.

METHODS

We used five waves of data from the US Population Assessment on Tobacco and Health Study (2013-2019) to assess the longitudinal relationship between cigarette coupon receipt and initiation of established cigarette smoking among young adults (18-24 years) who did not report current smoking and had smoked <100 cigarettes in their lifetime at baseline. Initiation of established cigarette smoking was defined as reporting current cigarette use and having smoked ≥100 cigarettes at follow-up. To test this relationship, we fit four discrete time survival models to an unbalanced person-period data set. The first model included our time-varying coupon receipt variable, which was lagged one wave. Subsequent models added sociodemographic, cigarette smoking exposure and other tobacco use variables.

RESULTS

Adopting the model adjusting for sociodemographic variables, respondents who received a coupon were found to be more likely to initiate established cigarette smoking at follow-up (adjusted HR (aHR): 2.31, 95% CI 1.41 to 3.80). This relationship remained significant when controlling for all covariates in the fully adjusted model (aHR: 1.96, 95% CI 1.18 to 3.26).

CONCLUSIONS

These findings show that receiving tobacco coupons may increase the likelihood that young adults will initiate established cigarette smoking, underscoring the need to address the effects of this tobacco marketing tactic.

Who uses cigarette price promotions in the U.S.? examining the combined effect of social identities

Introduction

Tobacco industry offers price promotions to promote cigarette smoking. Several social identities (e.g., women, people with low socioeconomic status) are independently associated with exposure and use of these promotions. We examined how combinations of social identities relate to use of cigarette price promotions.

Methods

We analyzed data from adults who reported current cigarette smoking and purchased their own cigarettes in the 1995-2019 U.S. Tobacco Use Supplement to the Current Population Survey (n = 35,749). We applied a statistical-learning boosting algorithm followed by weighted logistic regression models with 3-way interactions to identify combinations of social identities related to cigarette price promotion use.

Results

This analysis revealed that use of cigarette price promotions varied greatly by combinations of social identities. For example, estimated 39.80% of Asian female adults living in the Midwest used these promotions in their last purchase. Meanwhile, estimated 2.80% of Asian male 31-45-year-old adults reported the same behavior. Additionally, American Indian/Alaskan Native peoples were indicated in four of the ten combinations of social identities with highest prevalence of cigarette price promotion use.

Discussion

Our approach allowed for discovery of previously less appreciated social identities (e.g., race/ethnicity) related to high probability of using cigarette price promotions. These findings also revealed how combination of social-identity-related power dynamics may shape use of cigarette price promotions. Adopting this perspective in future surveillance and policy evaluation effort will provide better understanding in commercial tobacco use disparities.

The effect of tobacco tax increase on price-minimizing tobacco purchasing behaviours: A systematic review and meta-analysis

BACKGROUND AND AIMS

Tobacco product excise taxes are a cost-effective method for reducing tobacco consumption, but industry pricing and marketing strategies encourage consumers to engage in price-minimizing behaviours (PMBs). We investigated the relationship between tobacco tax increases and PMBs, measuring whether PMBs intensify following tax increases, whether low-income consumers with higher nicotine dependence are more likely to engage in PMBs and whether PMBs are negatively related to smoking cessation.

METHOD

This was a systematic review with meta-analysis of cross-sectional and longitudinal studies from seven databases up to March 2023, using studies that reported any product- and purchasing-related smoking behaviours post-tobacco tax increase in a general representative population. Sixty-eight studies were quality-assessed using the Newcastle-Ottawa scale. All studies were narratively synthesized, with five studies involving 13 068-26 575 participants providing data for pooled analyses on PMBs [purchasing lower-priced brands, roll-your-own (RYO) tobacco and cartons] pre- and post-tax increases using a random effects meta-analytical model.

RESULTS

Fifty-seven studies reported on legal PMBs, and 17 studies reported illicit cigarette purchasing. Meta-analysis showed that consecutive tax increases were positively associated with purchasing RYO [odds ratio (OR) = 1.60, 95% confidence interval (CI) = 1.04-2.46], especially in higher tobacco taxing environments, with substantial heterogeneity (I2 = 96%). Lower income and higher nicotine dependence were associated with purchasing lower-priced brands and RYO, whereas higher income and nicotine dependence were associated with purchasing cartons, large-sized packs and cross-border sales. Less evidence associated illicit tobacco purchases with tax increases or PMBs with smoking cessation.

CONCLUSIONS

Tobacco purchasers' PMBs vary widely by state, country and time-period within countries. Both legal and illegal PMBs, potentially influenced by industry pricing tactics, may exacerbate health inequalities and dilute the public health benefits of tobacco tax increases.

Going 'Super Value' in New Zealand: cigarette pricing strategies during a period of sustained annual excise tax increases

BACKGROUND

Between 2010 and 2020, the New Zealand (NZ) Government increased tobacco excise tax by inflation plus 10% each year. We reviewed market structure changes and examined whether NZ tobacco companies shifted excise tax increases to maintain the affordability of lower priced cigarette brands.

METHODS

We cluster-analysed market data that tobacco companies supply to the NZ Ministry of Health, created four price partitions and examined the size and share of these over time. For each partition, we analysed cigarette brand numbers and market share, calculated the volume-weighted real stick price for each year and compared this price across different price partitions. We calculated the net real retail price (price before tax) for each price partition and compared these prices before and after plain packaging took effect.

RESULTS

The number and market share of Super Value and Budget brands increased, while those of Everyday and Premium brands decreased. Differences between the price of Premium and Super Value brands increased, as did the net retail price difference for these partitions. Following plain packaging's implementation, Super Value brand numbers more than doubled; contrary to industry predictions, the price difference between these and higher priced brands did not narrow.

CONCLUSIONS

Between 2010 and 2020, NZ tobacco companies introduced more Super Value cigarette brands and shifted excise tax increases to reduce the impact these had on low-priced brands. Setting a minimum retail price for cigarettes could curtail tobacco companies' ability to undermine tobacco taxation policies designed to reduce smoking.

Cumulative Exposure to E-Cigarette Coupons and Changes in E-Cigarette Use Among U.S. Adults

INTRODUCTION

Coupons are an effective, frequently used tobacco marketing strategy. This study examined prospective associations between cumulative exposure to e-cigarette coupons and changes in e-cigarette use among U.S. adults.

METHODS

Data were from a representative U.S. adult cohort (n=19,824) in the Population Assessment of Tobacco and Health Study (waves [W] 2, 3, 4, and 5), collected from October 2014 to November 2019. Analysis was conducted in 2022. Four logistic regression models examined associations of a number of waves for which participants received e-cigarette coupons during W2-W4 with changes in e-cigarette use: W2 never use to W5 current use (initiation); W2 current nondaily use to W5 daily use (progression); W2 current use to W5 former use (cessation), and W2 former use to W5 current use (return-to-use).

RESULTS

Overall, 66.1% of U.S. adults never used e-cigarettes, 10.6% currently used e-cigarettes, and 23.4% formerly used e-cigarettes at W2. The average number of waves for which participants received e-cigarette coupons during W2-W4 was 0.13: 0.10 among W2 individuals who never used e-cigarettes, 0.30 among individuals who currently used e-cigarettes on a nondaily basis, 0.50 among individuals who currently used e-cigarettes, and 0.17 among individuals who formerly used e-cigarettes. Receiving coupons at increased waves was associated with (1) greater odds of initiation (AOR=1.58, 95% CI=1.26-1.97); (2) lower odds of cessation (AOR=0.78, 95% CI=0.67-0.91); and (3) increased odds of return-to-use (AOR=1.39, 95% CI=1.14-1.69). Findings did not differ by W2 cigarette smoking status.

CONCLUSIONS

E-cigarette coupons may encourage and sustain e-cigarette use. Policies restricting e-cigarette coupons may curb e-cigarette use.

Where to next for countries with high tobacco taxes? The potential for greater control of tobacco pricing through licensing regulation

Optimising the taxation of tobacco products should be among the highest priorities for health and hence economic policy in every country. The WHO Technical Manual on Tobacco Tax Policy and Administration released in April 2021 provides invaluable advice, including 26 best practice recommendations on policy design, administrative efficiency and addressing industry tactics to circumvent tobacco tax increases. Introducing and increasing tobacco taxes is the most important tobacco control measure for any jurisdiction. The effects of simple tax structures, high tax levels, and frequent above-inflation increases in specific excise duties can be enhanced through strict controls on packaging (including pack size), product design, and discounting. However, even with such measures, tobacco companies can continue to undermine the effectiveness of tax policy by offering some products in their ranges at very low prices, as well as gradually and selectively increasing the prices of some but not all products after tax increases. This paper is aimed at policymakers in countries that have already adopted best practice tax policy. It explores the idea of wholesale price capping combined with retail licensing to address the problems of brand proliferation, dispersion of prices, cushioning and strategic under/overshifting of tax increases, thereby radically and sustainably increasing the effectiveness of tobacco tax policy while also raising additional tax revenue for governments by reducing industry profitability.