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Tobacco pricing still affordable, despite rising prices

Posted on 03/08/2018

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Researchers from King's College London and the University of Bath have developed a new way of calculating affordability for tobacco in the UK, with findings published in the BMJ’s journal Tobacco Control.

Using this new method, they show that despite price rises, tobacco has only become a little less affordable, but not enough to change behaviours for the 9 million UK adults who continue to smoke.

Raising cigarette prices through tobacco taxation reduces smoking, but it is affected by smokers’ income, the prices of different types tobacco brands and products such as roll-your-own tobacco. Researchers used a new method of calculating affordability which took into account what individual smokers spent on their tobacco as well as their incomes.

They find that on a year-to-year basis, price rises (2.6% for factory-made cigarettes; 4.5% for roll-your-own tobacco), despite falling incomes, only contributed to a small decrease in affordability among those most hooked on smoking.

In 2002, smokers of factory made cigarettes kept 92% of their income after paying for their cigarettes, by 2014 this had gone down to 88%. For the first time, the researchers were able to assess the affordability of roll-your-own tobacco and found that this was more affordable: RYO smokers kept 96.3% of their income after paying for their roll-ups in 2006 which went down to 93.7% in 2014.

Lead author of the work, Dr Timea Partos, from the Addictions Department, King's College London explained: "We know that in general, increasing tax on tobacco reduces smoking and that the tobacco industry keeps some products cheap to counter the effect of tax rises. Using our new method which assesses affordability to individual smokers, we have shown that price rises don’t necessarily translate to less affordable tobacco."

Dr Rob Branston of the University of Bath's School of Management suggests: “If prices are going to have an effect on changing behaviours, consumers need to feel these changing at the till. Smokers can currently offset tax rises by adjusting their smoking behaviour so they don’t get a strong enough push to quit the deadly habit. Larger tax rises are needed to make smokers realise it is an unaffordable habit.”

Nevertheless, those most addicted are spending between 2% (for roll-your-own) and 4% more (for factory made) of their incomes than those least dependent – in 2014 this equated to around £500 to £1000 each year. The authors suggest that providing additional support to these smokers, who find it hardest to quit, must remain a priority for policy-makers.

The team’s new individualised measure for affordability takes individual income and variation in consumption into account, including the use of roll-your-own tobacco and untaxed or illicit consumption. As such, the paper argues it more accurately reflects actual changes in tobacco affordability over time and could be used by HM Treasury as a complementary measure.

This new way of determining the real cost of smoking to individuals goes beyond existing measures which generally rely on aggregate measures (estimates of national income and average cigarette prices) but fail to study in detail the relative costs felt by different groups in society.

Professor Ann McNeill Principal Investigator at King’s College London explained: “Smoking is largely invisible in high income communities but still common among the poor and disadvantaged in society. Price is a key motivator to stop smoking, so we must optimise taxation policy to reach all smokers, as well as provide the support that smokers need to stop.”

The work was supported by grants from the US National Cancer Institute, the Canadian Institutes of Health Research, and Cancer Research UK. Secondary analysis was funded by Cancer Research UK and National Institute for Health Research Public Health Research.

The paper, 'Individualised tobacco affordability in the UK 2002–2014: findings from the International Tobacco Control Policy Evaluation Project' (doi: 10.1136/tobaccocontrol-2017-054027) is authored by: Timea R Partos, Rob Branston, Rosemary Hiscock, Anna B Gilmore and Ann McNeill.

 

Story by the University of Bath. For further media information please contact Andy Dunne at a.j.dunne@bath.ac.uk or 01225 386319

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