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March 28th, 2016:

Combustible cigarettes cost less to use than e-cigarettes

Global evidence and tax policy implications



Some scholars suggest that price differences between combustible cigarettes and e-cigarettes could be effective in moving current combustible smokers to e-cigarettes, which could reduce tobacco-related death and disease. Currently, in most jurisdictions, e-cigarettes are not subject to the same excise taxes as combustible cigarettes, potentially providing the category with a price advantage over combustible cigarettes. This paper tests whether e-cigarettes tax advantage has translated into a price advantage.


In a sample of 45 countries, the price of combustible cigarettes, disposable e-cigarettes and rechargeable cigarettes were compared.


Comparable units of combustible cigarettes cost less than disposable e-cigarettes in almost every country in the sample. While the e-liquids consumed in rechargeable e-cigarettes might cost less per comparable unit than combustible cigarettes, the initial cost to purchase a rechargeable e-cigarette presents a significant cost barrier to switching from smoking to vaping.


Existing prices of e-cigarettes are generally much higher than of combustible cigarettes. If policymakers wish to tax e-cigarettes less than combustibles, forceful policy action—almost certainly through excise taxation—must raise the price of combustible cigarettes beyond the price of using e-cigarettes.

Vietnamese tobacco firm banned from producing cigarettes of Indonesian brands

Vietnam’s Ministry of Science and Technology has barred a Vietnamese cigarette producer from registering and producing two brands of an Indonesian tobacco company, citing its recent document sent to the Government Office and the Ministry of Industry and Trade.

The document states that the Science and Technology Ministry disapproves of Vietnam National Tobacco Corporation (Vinataba) registering JET and HERO – two products of Sumatra Tobacco Trading Company (STTC) – as the North Sumatra-based firm had objected to such a move.

In July 2015, Vinataba’s leader, via a lawyer, claimed in a proposal to the national office of intellectual property that STTC had not registered the trademarks in Vietnam for the past five years without reason, thus requesting to register the aforementioned, the ministry said.

The Vietnamese company also said it would produce the two types of cigarettes or their equivalents, reasoning that the two brands are contraband goods in Vietnam and STTC is involved in an illegal trade, the ministry added.

But the proposal was denied due to a lack of evidence that proved STTC was involved in smuggling, notwithstanding the fact that smuggling is not a legal ground to force the firm to cancel its trademarks since the products are officially retailed by its partner in Vietnam, namely Southern Airports Services Joint Stock Company.

The Science and Technology Ministry thus “granted no approval to the trademark cancelation proposal by Vinataba.”

A spokesperson of the industry-trade ministry said that Vinataba has little to no chance to register JET and HERO, adding that the firm would produce none of the brands, stating that such products are manufactured only after the trademark registration has been done.

The two brands are not the cause of tobacco smuggling in Vietnam, the Indonesian company asserted.

JET and HERO products account for more than 90 percent of the contraband cigarette market in Vietnam, according to the Vietnam Tobacco Association.

Both of the products breach a number of regulations on tobacco management stipulated by Vietnamese law, the association said.

JET and HERO brands are sold without the picture-based health warning, place and year of manufacture, nor the expiration date.

The toxicity of the two products is also far higher than the rates allowed by the Vietnamese Ministry of Health.

It is estimated that smoking will cause sickness or early death in 2.3 million Vietnamese even if they only smoke one cigarette a day.

Cigarette trafficking occurs at the Vietnam-Cambodia border gates including Svayrieng in Long An Province, Bavet and Moc Bai in Tay Ninh Province, and Ta Mau Kirivong and Xa Xia in Tay Ninh, domestic newswire VietnamNet revealed.

In 2013, 21.9 billion untaxed and illegal cigarettes were smuggled into Vietnam, said a report by Oxford Economics and the International Tax and Investment Center in September 2014.

A 2013 report by the Vietnam Tobacco Association showed that the country consumed a total of 4.174 billion packs of cigarettes in 2012.