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

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.

Restricting supply of tobacco products to pharmacies: a scoping review

OBJECTIVE

We synthesised the published literature on proposals to restrict tobacco supply to pharmacies, covering (1) policy concept/rationale/attempts, (2) policy impact and implementation and (3) policy and research recommendations.

DATA SOURCES

We searched eight databases (PubMed, CINAHL, Scopus, Web of Science, Embase, IPA, ProQuest and OATD) for publications with at least an English-language abstract. We searched reference lists of included publications manually.

STUDY SELECTION

One author screened all publications, and a second author reviewed a 10% subset. We focused on approaches to restrict the supply of tobacco products to pharmacies, without any restrictions on study design, location, participants or publication date.

DATA EXTRACTION

Data extraction adhered to the JBI Scoping Review Methodology and Preferred Reporting Items for Systematic Reviews and Meta-Analyses extension for Scoping Reviews checklist.

DATA SYNTHESIS

We included 18 publications. Among the 13 studies conducted in specific geographical contexts, 8 were from Aotearoa/New Zealand. Most publications (n=8) focused on effectiveness domains, indicating potential reductions in retailer density, smoking prevalence, disease burden, cost and increased opportunities for cessation advice. Seven explored policy acceptability among experts, pharmacists and people who smoke. Publications noted that pharmacy-only supply aligns with other programmes involving pharmacists, such as needle exchange programmes, but conflicts with efforts to phase out tobacco sales from the US and Canadian pharmacies.

CONCLUSIONS

Progress in tobacco retailing policy (eg, licensing, retailer incentives) and research (eg, assessment of policy equity and durability, application in other geographical contexts) are needed before a pharmacy-only tobacco supply model would be feasible.

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.

Geographical differences in the financial impacts of different forms of tobacco licence fees on small retailers in Scotland

OBJECTIVE

Retailer licencing fees are a promising avenue to regulate tobacco availability. However, they face strong opposition from retailers and the tobacco industry, who argue significant financial impacts. This study compares the impacts of different forms of tobacco licence schemes on retailers' profits in Scotland.

METHODS

We calculated gross profits from tobacco sales in 179 convenience stores across Scotland using 1 099 697 electronic point-of-sale records from 16 weeks between 2019 and 2022. We estimated different fees using universal, volumetric and separate urban/rural schemes. We identified the point at which 50% of retailers would no longer make a gross profit on tobacco sales for each scheme and modelled the financial impact of 10 incremental fee levels. The financial impact was assessed based on changes in retailers' tobacco gross profits. Differences by neighbourhood deprivation and urban/rural status were examined.

RESULTS

The gross profit from tobacco per convenience store averaged £15 859/year. Profits were 2.29 times higher in urban (vs rural) areas and 1.59 times higher in high-deprivation (vs low-deprivation) areas, attributable to higher sales volumes. Tobacco gross profit decreased proportionally with increasing fee levels. Universal and urban/rural fees had greater gross profit reductions in rural and/or less deprived areas, where profits were lower, compared with volumetric fees.

CONCLUSION

The introduction of tobacco licence fees offers a potential opportunity for reducing the availability of tobacco retailers. The likely impact of a tobacco licence fee is sensitive to the type of licence scheme implemented, the level at which fees are set and the retailers' location in relation to neighbourhood deprivation and rurality.

Tobacco purchasing in Australia during regular tax increases: findings from the International Tobacco Control Policy Evaluation Project

OBJECTIVE

We examined Australian tobacco purchasing trends, the average self-reported price paid within each purchase type and the association between type of tobacco product purchased and participant characteristics, including quit intentions, between 2007 and 2020.

METHODS

We analysed data collected from adults who smoked factory-made and/or roll-your-own (RYO) cigarettes in nine waves (2007-2020) of the International Tobacco Control Policy Evaluation Project Australia Survey (nsample=5452, nobservations=11 534). The main outcome measures were type of tobacco products purchased: RYO, carton, pack or pouch size and brand segment. Logistic regression, fit using generalised estimating equations, was estimated the association between the outcome and participant characteristics.

RESULTS

The reported price-minimising purchasing patterns increased from 2007 to 2020: any RYO (23.8-43.9%), large-sized pack (2007: 24.0% to 2016: 34.3%); shifting from large-sized to small-sized packs (2020: 37.7%), and economy brand (2007: 37.2% to 2020: 59.3%); shifting from large (2007: 55.8%) to small economy packs (2014: 15.3% to 2020: 48.1%). Individuals with a lower income, a higher nicotine dependence level and no quit intention were more likely to purchase RYO and large-sized packs.

CONCLUSION

RYO, large-sized packs and products with a low upfront cost (eg, small RYO pouches and small-sized economy brand packs) may appeal to people on low incomes. Australia's diverse tobacco pack and pouch sizes allow the tobacco industry to influence tobacco purchases. Standardising pack and pouch sizes may reduce some price-related marketing and especially benefit people who have a low income, are highly addicted and have no quit intention.