The truth about cigarette price increases in Britain

Tobacco tax increases are one of the most effective means of reducing tobacco use1 and, consequently, the tobacco industry has historically lobbied heavily against tax increases.2 With standardised packaging of cigarettes now under consideration in the UK, industry lobbying on the illicit tobacco trade has intensified.3 In November 2012, Japan Tobacco International (JTI), which has approximately a 40% share in the UK market,4 published a report, The Billion Pound Drop, on tobacco smuggling in the UK,5 which claims, inter alia, that tobacco tax increases fuel the illicit tobacco trade. Statements such as ‘the tax on a pack of premium brand cigarettes…has risen by more than £1… As a result, we have seen levels of non-UK duty paid consumption increase by almost 20% so far this year,’ litter the report. These claims are made despite evidence of the far more complex supply-side drivers of the illicit tobacco trade (including tobacco industry involvement),6 ,7 recent survey evidence showing that price was unrelated to levels of illicit tobacco use across Europe,8 and data …