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Tobacco boss’s struggle with arithmetic

Last week, David Crow, the CEO of British American Tobacco Australia, gave evidence to the House of Representatives  Standing Committee on Health and Ageing’s hearings into the Tobacco Plain Packaging Bill 2011.

Crow continued to push the argument that the tobacco industry has ushered into the front line of its opposition to plain packaging legislation: that plain packs will cause a deluge of illicit, black-market tobacco to flood the market.

Crow referred to the tobacco industry-commissioned Deloitte report, at one point saying: “It is robust research. It is based on thousands of interviews of consumers done in a very thorough way by Roy Morgan Research, who work with Deloitte. The aim was to estimate — and you will never get a real answer — the size. That size has been consistent over the past 18 months. The last report found that about 15.6% of the industry is illicit. We say one in five; one in 5½ cigarettes smoked in this country is illicit.”

You do, eh, Dave?

There are a couple of small problems with what Crow told the committee. He presumably has read the Deloitte report, which states on page 20 “This initial sample comprised of 9206 identified people. However after allowing for natural sample attrition, 949 respondents completed the survey.”

So 949 smokers in five capital cities, not “thousands”, answered questions about whether they believed they had used illegal tobacco (loose chop-chop, counterfeit or duty not paid). When it comes to counterfeit or duty not paid packs, how would they actually know?

Then there’s the small matter of Crow’s arithmetical,  or is it his rhetorical ability … 15.6% is not one in five (that’s what 20% is Dave!) or one in 5½ cigarettes.  It is one in 6.41, which is “less than one in 6″. So what’s the difference between one in five and one in six? Not much you ask? But when you’re talking about the number of cigarettes involved, this  means a difference of 741.69 tonnes of tobacco, using the Deloitte data.

Depending on what assumptions are made about the average weight of a cigarette (0.75-1grm) this translates to  between about  a mere 750m and 900m cigarettes and roll-your-own cigarette equivalents.

Crow would have been aware that in the week before he gave evidence, the Australian Institute of Health and Welfarepublished its latest estimate how much illicit tobacco is used by smokers in Australia. Surveying 26,648 people across Australia, of whom 15.1% were daily smokers (and with 17% smoking at all — 4530 smokers — now that’s thousands!), the AIHW found about 1.5% of Australian smokers regularly smoked unbranded tobacco in 2010 — see table 3.11 p39.

Predictably, Crow did not refer to this substantially lower estimate.

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