Evaluating compliance with track and trace and other regulations in Pakistan's cigarette market

BACKGROUND

To control the illicit cigarette market, the government of Pakistan adopted a Tracking and Tracing System (TTS) that was fully operational by July 2022, despite many roadblocks. By this date, major tobacco companies had either registered their brands with the tax authority and/or installed TTS.

METHODS

This paper is the first to evaluate the degree of compliance with the TTS by evaluating the extent and nature of illicit trade in tobacco products. We use randomised sampling to collect cigarette packs from waste recycling stores located in the ten most populous cities of Pakistan, to evaluate illicit trade penetration.

RESULTS AND POLICY IMPLICATIONS

Almost a third of the packs collected did not bear a tax stamp, mostly due to the lack of compliance by local companies, confirming a recent review of the TTS implementation by the Federal Bureau of Revenue (FBR). Even the largest companies that ostensibly adopted the TTS did not fully comply with the system, signalling poor enforcement. This is a missed opportunity, since a well-functioning TTS combined with proper enforcement is an effective means of controlling illicit tobacco trade, boosting tax revenue and improving public health. However, the enforcement should not be limited to the TTS since 23.6% of packs did not comply with other regulatory requirements.

Extent of illicit cigarette sales in Nepal: findings from a retail survey

INTRODUCTION

Increasing the tax on cigarettes is widely considered the most effective method to reduce its consumption. However, Nepal has a low cigarette tax as policymakers in Nepal are concerned about illicit trade of cigarettes if taxes are increased.

METHODS

The study employed a retail survey approach used in India suitable for countries with prevalent loose cigarette sales, with improved methodology. In 2021, empty cigarette packs generated in a day's loose cigarette sales were collected directly from cigarette retailers from 23 primary sampling units covering rural/urban, geographic divisions, border/non-border to India and tobacco factory locations. The central points of each primary sampling unit were identified, and retailers were selected for the survey. A cigarette pack was classified as illicit if it had at least one of the following attributes: (a) no authentic excise duty sticker, (b) no graphic health warning, (c) no mention of 'maximum retail price/MRP' and (d) no production date, name, address and trademark.

FINDINGS

We collected 4307 empty cigarette packs from 1204 retailers and 0.33% of them were classified as illicit. The estimates varied across location with the highest prevalence of illicit packs in Kathmandu (1.25%). All the illicit cigarettes were imported and were high-priced brands (>90%), mostly found in urban areas and not bordering India.

CONCLUSION

Our estimate of the illicit cigarette market share of 0.33% suggests that the industry's statement of 25% is grossly overstated.

Challenges and way forward for implementation of sugar taxation in the Middle East and North Africa (MENA)

BACKGROUND

Over consumption of added sugar beyond the World Health Organization (WHO) recommended level of 10% of daily energy intake has well-established negative health consequences including oral diseases. However, the average consumption of added sugar in the Middle East and North Africa region (MENA-World Bank's regional classification) is 70% higher than the WHO recommended level. Imposing taxes on added sugar has been proposed by the WHO to decrease its consumption. Yet, only 21.6% of the total MENA population are covered by taxation policies targeting added sugar.

CHALLENGES

Well-recognized challenges for the implementation of sugar taxation in MENA include the tactics used by the food and beverage industry to block these type of policies. However, there are also other unfamiliar hurdles specific to MENA. Historically, there have been incidents of protest and riots partially sparked by increased price of basic commodities, including sugar, in MENA countries. This may affect the readiness of policy makers in the region to impose added sugar taxes. In addition, there are also cultural, lifestyle and consumption behavioural barriers to implementing added sugar taxation. Ultra-processed foods and sugar-sweetened-beverages (SSBs) rich in added sugar are perceived by many in MENA as essential treats regardless of their health risks. Furthermore, some countries even provide subsidies for added sugar. Also, (oral) healthcare providers generally do not engage in policy advocacy mainly due to limited training on health policy.

WAYS FORWARD

Here, we discuss these challenges and suggest some ways forward such as (1) support from a health-oriented political leadership, (2) raising public awareness about the health risks of over consumption of sugar, (3) transparency during the policy-cycle development process, (4) providing a free and safe environment for a community dialogue around the proposed policy, (5) training of (oral) healthcare professionals on science communication and policy advocacy in local lay language/dialect, ideally evidence informed from local/regional studies, (6) selecting the appropriate political window of opportunity to introduce a sugar tax policy, and (7) clear and strict conflict of interest regulations to limit the influence of commercial players on health policy.

Estimating own-price and cross-price elasticity of cigarette consumption by price tiers in Bangladesh

OBJECTIVES

The overall price elasticity of cigarette consumption in Bangladesh has been studied extensively. The estimates of price elasticity by price tiers are not available in the existing literature.

METHODS

Using cohort data of nearly 6000 individuals from the International Tobacco Control Bangladesh survey, this study estimated the own-price and cross-price elasticity and income elasticity of cigarette demand by price tiers in Bangladesh. The elasticity was estimated in three stages of consumer decisions: whether to smoke, which brand to smoke and finally, how many cigarettes to smoke per day. The decision to smoke cigarettes and the choice of cigarette brands were modelled using instrumental variable probability regression. The cigarette consumption per day was modelled using seemingly unrelated regression.

RESULTS

The price elasticity of cigarette smoking prevalence with respect to the price of low-price cigarettes is -0.0487. The total elasticity for low-price cigarette consumption with respect to its own price is -0.1678. The own-price elasticity of smoking intensity of high-priced brands is -0.2512. The cross-price elasticity of low-price cigarette consumption with respect to high-price brand prices is 0.2643. The income elasticity of smoking prevalence overall is 0.0564. The income elasticity of daily consumption of low-price cigarettes is -0.1934 and for high-price cigarettes, it is 1.4044. The total income elasticity is 1.4608 for high-price cigarettes.

CONCLUSION

A cigarette tax policy that raises the prices of both low-price and high-price brands-but increases prices in the low-price tier at a faster rate than in the high-price tier and increases prices of all brands at a pace faster than income growth-can effectively reduce cigarette consumption in Bangladesh.

JEL CODES

H29, L66, I18.

The cigarette market in Brazil: new evidence on illicit practices from the 2019 National Health Survey

OBJECTIVE

To explore new evidence on illicit practices, such as selling legal brands below the minimum legal price (MLP), and smugglers selling illicit brands at or above the MLP.

METHODS

For the first time in Brazil, self-reported information on cigarette brand name and price paid per pack in smokers' last purchase from a nationally representative survey conducted in 2019 was used to distinguish the illicit and the legal markets. We estimated the proportion of illicit cigarette consumption, using the combination of brand and price.

RESULTS

The proportion of smuggled illicit cigarette consumption based on brands not approved on the Brazilian market was estimated at 38.6% (95% CI: 35.8% to 41.5%). When we added legal brands not paying taxes, it increased to 47.1% (95% CI: 44.2% to 49.9%). Around 25% of illicit brand cigarettes were sold at or above MLP.

CONCLUSIONS

In Brazil, since 2017 there is a lack of adjustment in tobacco taxes and the MLP for inflation and income growth. The increase in cigarette affordability and the presence on the market of a segment of 'higher-priced' illicit brands suggest patterns of illicit brand loyalty and/or perceived 'brand quality' among smokers of illicit cigarettes. The evidence also shows that a sizeable proportion of legal brand cigarettes were sold below the MLP. This study offers insight into what happened in circumstances in which a government failed to keep current with tax policies and the monitoring of domestic manufacturing. Brazil has been a world leader in the monitoring of the tobacco epidemic, and this study also offers an innovative use of data that an increasing number of countries are collecting.

Crowding-out effect of tobacco consumption in Serbia

BACKGROUND

Although smoking prevalence and intensity in Serbia have decreased in recent years, expenditures on tobacco products still represent a significant portion of household budgets. As households have limited resources at their disposal, consuming tobacco means that they spend less on other items such as food, clothing, education and healthcare. This is particularly true for low-income households, for whom the pressure on the household budget is even higher.

OBJECTIVES

In this research we estimate the effect of tobacco consumption on other consumption items in Serbia, which is the first estimation of this type for the countries in Eastern Europe.

METHODS

We use microdata from the Household Budget Survey and estimation approach that includes the combination of seemingly unrelated regression and instrumental variables. Besides estimating the overall effect we analyse the differences in effects between low-income, medium-income and high-income households.

RESULTS

Expenditures on tobacco reduce consumption on food, clothing and education and increase the budget shares spent on complementary consumption items such as alcohol, hotels, bars and restaurants. In most cases, the effects are more pronounced for low-income households than for other groups. These results suggest that aside from the negative effects of tobacco consumption on health, it also distorts household consumption structure, while affecting intrahousehold allocation and future health and development of other household members.

CONCLUSIONS

The results from this research underline the negative effect that tobacco expenditures have on consumption of other products. The only way for households to decrease expenditures on tobacco is to stop smoking, as the consumption of those who continue smoking changes less than cigarettes prices. To ensure that households stop smoking and instead direct their expenditures towards more productive purposes, the Serbian government should adopt new policies and strengthen enforcement of existing tobacco control measures.

Affordability of cigarettes in ten Southeastern European countries between 2008 and 2019

BACKGROUND

The empirical evidence shows that tobacco consumption is strongly associated with its affordability. The nominal growth in tobacco prices imposed by taxation should exceed or at least keep pace with nominal income growth, ensuring that tobacco products become less affordable over time. No analysis covering affordability issues in the Southeastern European (SEE) region has been conducted prior to this research.

OBJECTIVES

The study aims to examine trends in cigarette affordability in ten selected SEE countries over the period 2008-2019 and the impact of affordability on the consumption of cigarettes. On the policy side, it aims to support conducting of more effective evidence-based policy of tobacco taxation.

METHODS

The relative income price of cigarettes and the tobacco affordability index are used as affordability measures. The panel regression was run to estimate the impact of affordability measures and other covariates on cigarette consumption.

RESULTS

The affordability of cigarettes in the selected SEE countries has decreased on average but showed different patterns over the observed period. A decline in affordability has been more dynamic in Western Balkan (non-EU members) countries and low-and-middle-income countries within the SEE region. Econometric estimation confirms affordability as the main determinant of tobacco consumption, indicating that a decline in affordability considerably reduces tobacco consumption.

CONCLUSIONS

Despite the evidence, affordability is still widely ignored by SEE policymakers when designing national tobacco taxation policies. Policymakers should be aware of the risk that future increases in cigarette prices could lag behind real income growth, making tax policy less effective at reducing consumption. Reducing affordability should be the paramount consideration in designing effective tobacco taxation policies.

Relationship Between Product Features and the Prices of e-Cigarette Devices Sold in Web-Based Vape Shops: Comparison Study Using a Linear Regression Model

BACKGROUND

Open-system electronic cigarette (EC) product features, such as battery capacity, maximum output wattage, and so forth, are major components that drive product costs and may influence use patterns. Moreover, continued innovation and monitoring of product features and prices will provide critical information for designing appropriate taxation policies and product regulations.

OBJECTIVE

This study will examine how product features are associated with the prices of devices sold in web-based vape shops.

METHODS

We draw samples from 5 popular, US-based, web-based vape shops from April to August 2022 to examine starter kits, device-only products, and e-liquid container-only products. We implemented a linear regression model with a store-fixed effect to examine the association between device attributes and prices.

RESULTS

EC starter kits or devices vary significantly by type, with mod prices being much higher than pod and vape pen prices. The prices of mod starter kits were even lower than those of mod devices, suggesting that mod starter kits are discounted in web-based vape shops. The price of mod kits, mod device-only products, and pod kits increased as the battery capacity and output wattage increased. For vape pens, the price was positively associated with the volume size of the e-liquid container. On the other hand, the price of pod kits was positively associated with the number of containers.

CONCLUSIONS

A unit-based specific tax, therefore, will impose a higher tax burden on lower-priced devices such as vape pens or pod systems and a lower tax burden on mod devices. A volume- or capacity-based specific tax on devices will impose a higher tax burden on vape pens with a larger container size. Meanwhile, ad valorem taxes pegged to wholesale or retail prices would apply evenly across device types, meaning those with advanced features such as higher battery capacities and output wattage would face higher rates. Therefore, policy makers could manipulate tax rates by device type to discourage the use of certain device products.

Trend in basic oral treatment needs in relation to taxation of sweets, ice cream, and sugar-sweetened beverages in Finland: a registry-based study

OBJECTIVE

The aims were to explore the trend in basic oral treatment needs and total operating cost of public dental services (PDS) in relation to total excise tax revenue generated from sugary products during 2011-2020 and to evaluate the impact of tax policy in excise tax revenue of sugary products and average sugar consumption.

METHODS

The study comprised longitudinal data retrieved from Finnish registries during the years 2011-2020. Basic oral treatment needs, and total operating cost of PDS, total excise tax revenue generated from sugary products and average sugar consumed (kg per capita) during the years 2011-2020 were obtained. Simplified panel analyses and sensitivity analyses were used to evaluate the effects of explanatory variables on outcomes.  Results: An approximate one EUR 1,000,000 increase in total excise tax revenue generated from sugary products corresponds to a 0.4% increase in total operating cost of PDS. There was a significant positive trend in total operating cost of PDS in Finland over the study period. Similarly, an approximate one EUR 1,000,000 rise in total excise tax revenue corresponds to a 0.2% increase in basic oral treatment needs. Additionally, there was a statistically significant difference in the average excise tax revenue for sugary products between the periods before and after 2017.

CONCLUSION

No change in average sugar consumption was observed despite implementing the new sugar policy. Therefore, it may be worthwhile to reconsider the excise tax on sweets and ice cream as it will significantly increase the total national revenues.

National taxation on sugar-sweetened beverages and its association with overweight, obesity, and diabetes

BACKGROUND

Consumption of sugar-sweetened beverages (SSBs) has been linked to several adverse health outcomes, thus many countries introduced taxation to reduce it.

OBJECTIVES

To summarize national SSB taxation laws and to assess their association with obesity, overweight and diabetes.

METHODS

We conducted a systematic scoping review up to January 2022 on PubMed, Web of Science, Embase, and Google Search to identify taxes on SSBs. An interrupted time series analysis (ITSA) was conducted on 17 countries with taxation implemented in 2013 or before to evaluate the level and slope modifications in the rate of change of standardized prevalence rates of overweight, obesity, and diabetes. Random-effects meta-regression was used to assess whether year of entry into force of the law, national income, and tax design affected observed results.

RESULTS

We included 76 tax laws issued between 1940 and 2020 by 43 countries, which were heterogeneous in terms of tax design, amount, and taxed products. Among children and adolescents, ITSA showed level or slope reduction for prevalence of overweight and obesity in 5 (Brazil, Samoa, Palau, Panama, Tonga) and 6 (El Salvador, Uruguay, Nauru, Norway, Palau, Tonga) countries out of 17, respectively. No clear pattern of modification of results according to investigated factors emerged from the meta-regression analysis.

CONCLUSIONS

Taxation is highly heterogeneous across countries in terms of products and design, which might influence its effectiveness. Our findings provide some evidence regarding a deceleration of the increasing prevalence rates of overweight and obesity among children occurring in some countries following introduction of taxation. PROSPERO registration number: CRD42021233309.

Menstrual Products: Attitudes About Taxation and Safety

Background: This study explored factors associated with the differences between women and men in attitudes, norms, and the support of taxation of menstrual products (MPs) and menstrual-adjacent products. It also investigated the use of these products in women. Methods: Young adults from 18 to 30 years of age were recruited via social media, listserve emails, and flyers placed throughout a university campus. Following cognitive interviewing, a survey investigated attitudes, beliefs, and behaviors associated with MPs. Results: Individuals self-identified as men or women. Women (n = 154) had more positive general attitudes, less positive safety attitudes, and less support for taxation of MPs than men (n = 43). Regression analyses indicated that factors, such as race, age, attitudes, norms, and taxation, were associated with product use. Conclusions: Attitudes about safety and taxation differ for men and women. Tax policies and attitude-shifting interventions need to be tailored to their audience, and our study can inform that effort.

As countries improve their cigarette tax policy, cigarette consumption declines

BACKGROUND

This study examines the association between the Tobacconomics cigarette tax scores and cigarette consumption in 97 countries during the period of 2014-2020.

METHODS

Data on countries' retail cigarette sales and overall cigarette tax scores from 2014 to 2020 are drawn from the proprietary Euromonitor International database and the Tobacconomics Cigarette Tax Scorecard (second edition). Information on countries' tobacco control environments and demographic characteristics is from the relevant years' WHO Report on the Global Tobacco Epidemic, and the World Bank's World Development Indicators database. Ordinary least squares regressions are employed to examine the link between countries' overall cigarette tax scores and cigarette consumption. All regressions control for countries' tobacco control environments, countries' demographic characteristics, year indicators and country fixed effects.

RESULTS

Each unit increase in the overall cigarette tax scores is significantly associated with a reduction of 9% in countries' per-capita cigarette consumption during 2014-2020. The reduction is more pronounced in low and middle-income countries (9%) than in high-income countries (6%). The modest improvement in scores from 2014 to 2020 is associated with a reduction of 3.27% in consumption, while consumption could have been reduced by 20.74% had countries implemented optimal tax policies that would earn the highest score of 5.

CONCLUSIONS

Our results provide evidence on the association between higher cigarette tax scores and lower cigarette consumption. To reduce tobacco consumption, governments must strive to implement all four components in the Cigarette Tax Scorecard at the highest level.

Cigarette prices and smoking among adults in eight sub-Saharan African countries: evidence from the Global Adult Tobacco Survey

BACKGROUND

Despite growing concern over tobacco use in sub-Saharan Africa, evidence on the association between cigarette prices and adult smoking behaviour in the region is limited.

OBJECTIVES

To provide new evidence on the association between cigarette prices and adult smoking in eight sub-Saharan African countries.

METHODS

The analysis uses data from 51 270 individuals taken from the Global Adult Tobacco Survey, which was conducted in eight African countries during 2012-2018. The relationship between prices and smoking is estimated using probit models for smoking participation and generalised linear models for conditional cigarette demand.

RESULTS

Higher prices are significantly associated with lower cigarette demand across African countries. The estimated price elasticity of participation is -0.362 (95% CI -0.547 to -0.177). The price elasticity of conditional cigarette demand is -0.133 (95% CI -0.194 to -0.072) for people who have just started smoking. The estimated total price elasticity of cigarette demand by new adult smokers is -0.495. The absolute value of the conditional demand elasticity becomes smaller by 0.004 units for each additional year that a person smokes. For the average smoker in the sample, with a smoking duration of 18.07 years, the total elasticity estimate is -0.422.

CONCLUSIONS

Higher cigarette prices significantly decrease the likelihood of smoking and decrease the intensity of cigarette consumption among African adults. Increases in the excise tax that increase the retail price of cigarettes will play an important role in reducing adult tobacco use on the continent. Governments are encouraged to increase excise taxes to improve public health.

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.

Improving estimates of the illicit cigarette trade through collaboration: lessons from two studies of Malaysia

This paper critically analyses contrasting estimates of Malaysia's illicit cigarette trade in 2011, 2015 and 2019 by Bui et al and Koya et al who previously produced independent estimates at about the same time using tax gap analysis. Collaboration between the two authors' teams emerged due to the discrepancies in their results, generating this paper to explore the methodological issues identified and hence produce revised estimates of the rate of illicit. Key issues identified were: Bui et al's assessment of legally imported cigarettes impacting all years; their exclusion of ad valorem duty affecting the 2011 and 2015 estimates; Koya et al overlooked the value of cigarettes for export market in their ad valorem calculation and used the sales value of imported tobacco/tobacco products, not just cigarettes, both of which impact estimates for 2011 and 2015. Recalculations using Koya et al's consumption data reveal that in 2019, illicit cigarettes accounted for about 70% of the market, which is higher than Bui et al's estimate (38%) but slightly lower than Koya et al's (72%). For 2011 and 2015 where ad valorem applied, the corrected estimates show a share of the illicit cigarette market of approximately 41.1% and 52.7%, respectively, differing from Bui et al's 0% in 2011 and 29.6% in 2015, and Koya et al's 51% in 2011 and 55% in 2015. This paper provides essential lessons for addressing methodological issues between authors' teams and updated estimates of Malaysia's illicit cigarette trade, verifying that Malaysia faces a substantial illicit cigarette trade problem.

Tobacco industry pricing strategies for single cigarettes and multistick packs after excise tax increases in Colombia

INTRODUCTION

Taxes on tobacco products are an efficient way of reducing consumption. However, they are only effective if passed on to consumers with higher prices. This study aims to examine tobacco industry (TI) pricing strategies in response to tax increases, and whether they differ by price segments or presentation (packs or individual sticks) in Colombia. This is the first such academic study in Latin America and the first anywhere to include the market for single sticks.

METHODS

Using data on cigarette pricing/taxation from a survey of smokers (2016-2017) and official government data on pricing (2007-2019), the TI's pricing strategies were examined, split by brand, price segments, different sized packs and single cigarettes.

RESULTS

The TI employed targeted pricing strategies in Colombia: differentially shifting taxes; and launching new brands/brand variants. The industry overshifted taxes when increases were smaller and predictable, but used undershifting more when there was a larger increase in 2017, after which it mostly overshifted on budget and premium (but undershifted mid-priced) brands. The prices for single sticks increased more than the tax increase in 2017 when their consumption also increased.

CONCLUSION

The pricing strategies identified suggest excise taxes can be increased further, particularly the specific component, to reduce the price gap between brand segments. Brands should be restricted to a single variant along with prohibitions on launching new brands/brand variants. Lastly, since the pricing of single sticks does not match the pattern of packs, more monitoring of their sales and distribution is required, especially since they promote consumption and hinder effective implementation of tobacco tax policies.

Economic research in waterpipe tobacco smoking: reflections on data, demand, taxes, equity and health modelling

Economic evaluation of tobacco control policies is common in high-income settings and mainly focuses on cigarette smoking. Evidence suggests that increasing the excise tax of tobacco products is a consistently effective tool for reducing tobacco use and is an efficient mechanism for increasing government revenues. However, less research has been conducted in low/middle-income countries where other tobacco forms are common. This paper presents insights from our work on the economics of waterpipe tobacco smoking conducted in the Eastern Mediterranean Region where waterpipe smoking originated and is highly prevalent. The specific areas related to economics of waterpipe smoking considered herein are: price elasticity, taxation, government revenue, expenditure and healthcare costs. This paper aims to provide practical guidance for researchers investigating the economics of waterpipe tobacco with potential implications for other novel tobacco products. We present lessons learnt across five thematic areas: data, demand, taxes, equity and health modelling. We also highlight knowledge gaps to be addressed in future research. Research implications include designing comprehensive assessment tools that investigate heterogeneity in waterpipe smoking patterns; accounting for cross-price elasticity of demand with other tobacco products; exploring the change in waterpipe tobacco smoking in response to a tax increase and analysing the equity impact of waterpipe tobacco control interventions.

The effect of cigarette and e-cigarette taxes on prescriptions for smoking cessation medications

OBJECTIVE

To test the effect of cigarette and e-cigarette taxes on prescriptions for smoking cessation medications.

DATA SOURCE

Symphony Health, IDV all-payer prescription claims data for the United States over the period 2009-2017. Prescription fills for smoking cessation products were provided at the patient's age, patient's sex, brand/generic, payment type, year, and quarter levels.

STUDY DESIGN

We study the effect of state-level cigarette and e-cigarette tax rates on prescriptions for smoking cessation medications using two-way fixed effect modified difference-in-differences regressions. We also use a multiperiod difference-in-differences estimator robust to bias from dynamic and heterogeneous treatment effects with a staggered policy rollout.

DATA COLLECTION/EXTRACTION METHODS

We use fills for Chantix, Zyban, and their generics, as well as Food and Drug Administration-approved nicotine replacement therapies that are paid for by insurance.

PRINCIPAL FINDINGS

We observe no statistically significant change in prescription fills following an increase in the e-cigarette tax rate, though we are unable to rule out potentially large effects. However, following a $1.00 increase in the cigarette tax rate, we observe a 1052 increase in prescription fills per 100,000 adults (95% CI: 57, 2046; 4.2% increase). The effect of cigarette taxes on prescription fills was particularly large for 18-34 year-olds.

CONCLUSIONS

Our findings suggest that, during a period when e-cigarettes are widely available, cigarette tax increases remain effective in increasing use of these medications, but e-cigarette taxes do not increase use of these medications.

Procedural fairness and the resilience of health financing reforms in Ukraine

In 2017, Ukraine's Parliament passed legislation establishing a single health benefit package for the entire population called the Programme of Medical Guarantees,‎ financed through general taxes and administered by a single national purchasing agency. This legislation was in line with key principles for financing universal health coverage. However, health professionals and some policymakers have been critical of elements of the reform, including its reliance on general taxes as the source of funding. Using qualitative methods and drawing on deliberative democratic theory and criteria for procedural fairness, this study argues that the acceptance and sustainability of these reforms could have been strengthened by making the decision-making process fairer. It suggests that three factors limited the extent of stakeholders' participation in this process: first, a perception among reformers that fast-paced decision-making was required because there was only a short political window for much needed reforms; second, a lack of trust among reformers in the motives, representativeness, and knowledge of some stakeholders; and third, an under-appreciation of the importance of dialogic engagement with the public. These findings highlight a profound challenge for policymakers. In retrospect, some of those involved in the reform's design and implementation believe that a more meaningful engagement with the public and stakeholders who opposed the reform might have strengthened its legitimacy and durability. At the same time, the study shows how difficult it is to have an inclusive process in settings where some actors may be driven by unconstrained self-interest or lack the capacity to be representative or knowledgeable interlocutors. It suggests that investments in deliberative capital (the attitudes and behaviours that facilitate good deliberation) and in civil society capacity may help overcome this difficulty.

No smoking gun: tobacco taxation and smuggling in Sierra Leone

OBJECTIVE

To evaluate the common industry claim that higher tobacco taxation leads to higher levels of smuggling, particularly in a limited state capacity setting.

DESIGN

This paper evaluates the effects of a tobacco tax increase in Sierra Leone on smuggling by using gap analyses. Its models are based on multiple rounds of the Demographic and Health Survey and customs data as well as newly collected data on cigarette prices.

RESULTS

The paper shows that despite a substantial increase in cigarette taxation, and despite the absence of other formal tobacco control policies, smuggling has not increased in Sierra Leone. Its primary model shows a decrease in cigarette smuggling by 16.74% following the tax increase, alongside a decrease in cigarette consumption more widely and an increase in tax revenue.

CONCLUSIONS

By presenting a low income and lower enforcement capacity case study, this paper provides novel and critical evidence to the debate on the tax-smuggling link. Furthermore, it points to new questions on how states in these contexts can limit cigarette smuggling.

Cask wine: Describing drinking patterns associated with Australia's cheapest alcohol

INTRODUCTION

In Australia, cask wine is the cheapest alcoholic beverage available, offering the lowest price per standard drink. Despite this, there is little research on the contextual correlates of cask wine consumption. Therefore, the current study aims to describe how cask wine consumption has changed over the last decade. Then, through comparisons between cask and bottled wine, how prices, typical drinking locations, and patterns of consumption differ between the beverages.

METHODS

Cross-sectional data was drawn from two sources. Four waves of the National Drug Strategy Household Survey were used (2010, 2013, 2016 and 2019) in order to examine consumption trends over time. The International Alcohol Control study (2013) in Australia was additionally used to explore pricing and consumption trends in greater detail.

RESULTS

Cask wine was considerably cheaper than other forms of wine at $0.54 per standard drink (95% confidence interval [CI] 0.45-0.62, p < 0.05). Consumption trends associated with cask wine differed from that of bottled wine, being consumed almost entirely at home and in significantly greater quantity (standard drinks per day 7.8, 95% CI 6.25-9.26, p < 0.05). Among the heaviest drinkers, 13% (95% CI 7.2-18.8, p < 0.05) consumed cask wine as their main drink, compared to 5% (95% CI 3.76-6.24, p < 0.05) consuming bottled wine.

CONCLUSIONS

Cask wine drinkers are disproportionately more likely to consume higher amounts of alcohol, paying less per drink doing so compared to bottled wine drinkers. As all cask wine purchases were under $1.30, a minimum unit price may largely affect cask wine purchases, applying to a far smaller proportion of bottled wine.

Promoting convergence and closing gaps using affordability-based minimum taxes: an illustration using the European Union Tobacco Tax Directive

BACKGROUND

The rules governing tobacco taxation in the European Union (EU) are currently under revision. Earlier research has proposed reforms aimed at stimulating price convergence across countries by linking national minimum taxes to a measure of average prices across the EU. This paper proposes that revised tax rules include an affordability criterion whereby minimum taxes are required to be no less than a common prespecified fraction of domestic average disposable income.

METHODS

Longitudinal data on prices and taxes on factory-made cigarettes and roll-your-own tobacco in 24 EU member states and the UK between 2011 and 2019 are used to estimate econometric models for their weighted average prices as a function of taxes. Two scenarios are simulated with the models' estimates: a baseline scenario for the actual tax stance pertaining to 2020 and a reform scenario implementing an additional affordability criterion.

RESULTS

The affordability criterion would significantly increase the price of both tobacco products, particularly in richer countries with relatively low tobacco prices that are often not affected by the increases in nominal minima mandated by the EU rules. There would also be some price convergence between the two tobacco products, both on average and in the majority of countries.

CONCLUSIONS

Such results show an affordability criterion could be a potentially fruitful complement to the tax reforms proposed in earlier research.

Follow the money: a closer look at US tobacco industry marketing expenditures

INTRODUCTION

While much of the concern with tobacco industry marketing has focused on direct media advertising, a less explored form of marketing strategy is to discount prices. Price discounting is important because it keeps the purchase price low and can undermine the impact of tax increases.

METHODS

We examine annual US marketing expenditures from 1975 to 2019 by the largest cigarette and smokeless tobacco companies as reported to the Federal Trade Commission. We consider three categories: direct advertising, promotional allowances and price discounting. In addition to considering trends in these expenditures, we examine how price discounting expenditures relate to changes in product prices and excise taxes.

RESULTS

US direct advertising expenditures for cigarettes fell from 80% of total industry marketing expenditures in 1975 to less than 3% in 2019, while falling from 39% in 1985 to 6% in 2019 for smokeless tobacco. Price discounting expenditures for cigarettes became prominent after the Master Settlement Agreement and related tax increases in 2002. By 2019, 87% of cigarette marketing expenditures were for price discounts and 7% for promotional allowances. Smokeless marketing expenditures were similar: 72% for price promotions and 13% for promotional allowances. Price discounting increased with prices and taxes until reaching their currently high levels.

CONCLUSIONS

Between 1975 and 2019, direct advertising dramatically fell while price discounting and promotional expenditures increased. Local, state and federal policies are needed that apply non-tax mechanisms to increase tobacco prices and restrict industry contracts to offset industry marketing strategies. Further study is needed to better understand industry decisions about marketing expenditures.

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.