The case for Ofsmoke: the potential for price cap regulation of tobacco to raise £500 million per year in the UK

Research output: Contribution to journalArticlepeer-review

21 Citations (SciVal)
209 Downloads (Pure)


Objective: A system of price-cap regulation has previously been suggested to address the market failure inherent to the tobacco industry. This would benefit public health directly (eg, by making it extremely difficult for the industry to sell cut-price cigarettes, or use price as a marketing strategy) and indirectly (eg, by reducing the available money the industry has for spending on marketing and lobbying). This paper explores the feasibility of applying such a scheme in the UK.

Methods: The impact of price-capping is modelled using optimistic and conservative scenarios, each with different assumptions, and using 2009 and 2010 profit data for the major companies selling tobacco in the UK. The models are used to calculate by how much would profit be reduced through the imposition of price caps, and thus, how much revenue could be raised in additional taxes, assuming the end price the consumer pays does not change.

Results: Tobacco companies enjoy massive profit margins, up to 67%, in the UK. The optimistic scenario suggests a potential increase in UK tobacco tax revenue of £585.7 million in 2010 (£548.4 million in 2009), while the conservative model suggests an increase in revenue of £433.6 million in 2010 (£399.2 million in 2009). This would be approximately enough to fund, twice over, UK-wide antitobacco smuggling measures, and smoking cessation services in England, including the associated pharmacotherapies, to help people stop smoking.

Conclusions: Applying a system of price-cap regulation in the UK would raise around £500 million per annum (US$750 million). This is likely to be an underestimate because of cautious assumptions used in the model. These significant financial benefits, in addition to the public health benefits that would be generated, suggest this is a policy that should be given serious consideration.
Original languageEnglish
Pages (from-to)45-50
Number of pages6
JournalTobacco Control
Issue number1
Early online date14 Jan 2013
Publication statusPublished - 12 Dec 2013


  • Sustainability
  • Tobacco industry
  • tobacco tax and price
  • regulation
  • market failure


Dive into the research topics of 'The case for Ofsmoke: the potential for price cap regulation of tobacco to raise £500 million per year in the UK'. Together they form a unique fingerprint.

Cite this