Tobacco Control

RAISING CIGARETTE TAXES REDUCES SMOKING, ESPECIALLY AMONG KIDS (AND THE CIGARETTE COMPANIES KNOW IT) – FULL REPORT HERE

The cigarette companies have opposed tobacco tax increases by arguing that raising cigarette prices would not reduce adult or youth smoking. But the companies’ internal documents, disclosed in the tobacco lawsuits, show that they know very well that raising cigarette prices is one of the most effective ways to prevent and reduce smoking, especially among kids.

• Philip Morris: Of all the concerns, there is one – taxation – that alarms us the most. While marketing restrictions and public and passive smoking [restrictions] do depress volume, in our experience taxation depresses it much more severely. Our concern for taxation is, therefore, central to our thinking …
• Philip Morris: When the tax goes up, industry loses volume and profits as many smokers cut back.
• RJ Reynolds: If prices were 10% higher, 12-17 incidence [the percentage of kids who smoke] would be 11.9% lower.
• Philip Morris: It is clear that price has a pronounced effect on the smoking prevalence of teenagers, and that the goals of reducing teenage smoking and balancing the budget would both be served by increasing the Federal excise tax on cigarettes.
• Philip Morris: Jeffrey Harris of MIT calculated…that the 1982-83 round of price increases caused two million adults to quit smoking and prevented 600,000 teenagers from starting to smoke…We don’t need to have that happen again.
• Philip Morris: A high cigarette price, more than any other cigarette attribute, has the most dramatic impact on the share of the quitting population…price, not tar level, is the main driving force for quitting.

The cigarette companies have even publicly admitted the effectiveness of tax increases to deter smoking in their required filings with the U.S. Securities and Exchange Commission.

• Philip Morris: Increases in excise and similar taxes have had an adverse impact on sales of cigarettes. Any future increases, the extent of which cannot be predicted, may result in volume declines for the cigarette industry.
• Loews/Lorillard Tobacco: Significant increases in federal and state excise taxes on cigarettes . . .have, and are likely to continue to have, an adverse effect on cigarette sales.
• R.J. Reynolds: Substantial increases in state and federal excise taxes on cigarettes. . . have had and will likely continue to have an adverse effect on cigarette sales.

Economic Research On Cigarette Tax Increases Reducing Smoking.

Numerous economic studies in peer-reviewed journals have documented that cigarette tax or price increases reduce both adult and underage smoking. The general consensus is that every 10 percent increase in the real price of cigarettes reduces overall cigarette consumption by approximately three to five percent, reduces the number of young-adult smokers by 3.5 percent, and reduces the number of kids who smoke by six or seven percent. 8 Research studies have also found that:

• Among all adults or all youths, cigarette price increases work even more effectively to prevent and reduce smoking among males, Blacks, Hispanics, pregnant women, and lower-income persons.
• Cigarette price increases not only reduce youth smoking but also reduce the number of kids who smoke marijuana and the amount of marijuana consumed by continuing regular users.
• Higher taxes on spit tobacco reduce its use, particularly among young males.

BENEFITS FROM A 125-CENT CIGARETTE TAX INCREASE IN WISCONSIN

Current State Cigarette Tax: 77 Cents Per Pack (30th among all states)
Smoking-caused costs in state per taxed pack sold: $9.53
Average retail price per pack: $4.08 (state share from excise and sales taxes: $0.96)
Annual health care expenditures in the Wisconsin directly caused by tobacco use: $2.02 billion
Total state Medicaid program smoking costs each year: $480.0 million
Annual state cigarette tax revenue: $294.3 million (2005)
Last Wisconsin Cigarette Tax Increase: 10/1/2001

Projected Benefits From Increasing the State Cigarette Tax By 125 Cents Per Pack

• New state cigarette tax revenues each year: $252.8 million
• Pack sales decline in state: -121.4 million
• Percent decrease in youth smoking: 20.9%
• Increase in total number of kids alive today who will not become smokers: 84,100
• Number of current adult smokers in the state who would quit: 42,500
• Number of smoking-affected births avoided over next five years: 11,700
• Number of current adult smokers saved from smoking-caused death: 11,200
• Number of kids alive today saved from later premature smoking-caused death: 26,900
• 5-Year healthcare savings from fewer smoking-affected pregnancies & births: $19.9 million
• 5-year healthcare savings from fewer smoking-caused heart attacks & strokes: $20.0 million
• Long-term healthcare savings in state from adult & youth smoking declines: $1,875.5 million

Wisconsin Cigarette Tax Increase Benefits – Full Document Here

Full report here

Impact of tobacco tax reforms on tobacco prices and tobacco use in Australia

Objective: To document the impact of changes to tobacco taxes on the range and price of tobacco sold during the period when the National Tobacco Campaign (NTC) was run.

Data sources: Information about brand availability, pack size, and price was extracted from Australian Retail Tobacconist. A retail observational survey was undertaken to monitor actual retail prices. Data on cigarette prices, brands, packet configurations, and outlets from which they were purchased were obtained from the benchmark and three follow up population telephone surveys conducted to evaluate the NTC.

Method: Data from the three sources were compared to see the extent to which the impact of tax changes had been offset by greater retail discounting and a more concerted effort by consumers to purchase cheaper products.

Results: Smokers were unable to cushion themselves from the sharp price increases that occurred during the third phase of the NTC. Both average recommended retail prices of manufactured cigarettes and average actual cigarette prices paid by smokers increased by 25% in real prices.

Conclusion: The fall in smoking prevalence over the first two phases of the NTC was substantially greater than would be expected due to tax changes alone. The fall in smoking consumption over the first two phases was slightly less than would be expected and in the third considerably higher than would be expected.

Tobacco sellers, like alcohol sellers, should be licensed – to prevent illegal sale to children, and to cover the costs of regulation including retailer education and compliance monitoring.

In 2002 the Commonwealth commissioned a report into the desirability and best practice arrangements for the licensing of tobacco retailers and wholesalers. The findings, endorsed by the Intergovernmental Committee on Drugs, are yet to be fully implemented.

The report, by the Allen Consultancy Group, examined both the benefits and the objections and concluded that there is “a strong case, based on economic and public health rationales, to introduce licensing of tobacco sellers”. The report said:
• Licenses should be held by all tobacco wholesalers and retailers.
• Compliance with general tobacco control laws should be the minimum operational standard required by a licence holder.
• There should be scope for conditions to be applied to licences where this supports compliance with tobacco control laws.
• A licence should be able to be refused or withdrawn if the responsible person has contravened tobacco control laws.
• Licence fees should be set to recover only the costs associated with the
o administration of the licensing scheme;
o enforcement of the licences including inspections; and
o provision of information to applicants and licensees to ensure their continued and future compliance.
• Tobacco sales licensing should be seen as a health issue and controlled by health officials who may contract out elements of the scheme (licensing, inspections, enforcement) to third parties.
• There should be a graduated penalty structure that includes warnings, penalties, prosecutions and scope for licence withdrawal.

Objections to tobacco licensing or registration schemes
The authors concluded that the impediments – industry concerns about the cost of the schemes, some jurisdictional hesitancy and the general regulatory move away from licensing – should be countered on grounds that tobacco licensing schemes are clearly in the public interest.

View the report at www.health.gov.au/internet/wcms/publishing.nsf/content/health-pubhlth-strateg-drugs-tobacco-other.htm/$FILE/licensing_tobacco.pdf

They’ve done it
Four Australian jurisdictions – South Australia, Western Australia, Tasmania and the ACT – require tobacco sellers to be licensed.

The Smoke You Don’t See: Uncovering Tobacco Industry Scientific Strategies Aimed Against Environmental Tobacco Smoke Policies

Objectives.

This review details the tobacco industry’s scientific campaign aimed against policies addressing environmental tobacco smoke (ETS) and efforts to undermine US regulatory agencies from approximately 1988 to 1993.

Methods.

The public availability of more than 40 million internal, once-secret tobacco company documents allowed an unedited and historical look at tobacco industry strategies.

Results.

The analysis showed that the tobacco industry went to great lengths to battle the Environmental Tobacco Smoke issue worldwide by camouflaging its involvement and creating an impression of legitimate, unbiased scientific research.

Conclusions.

There is a need for further international monitoring of industry-produced science and for significant improvements in tobacco document accessibility. (Am J Public Health. 2001;91:1419–1423)

View the complete research paper here: http://tobacco.cleartheair.org.hk/documents/environmental-tobacco-smoke-policies.pdf