Monday, June 17, 2024

Australian Economists Call For Streamlined Cigarette Prices 


In Australia, brands’ logos on cigarette packets have been replaced by plain packaging and graphic images illustrating the dangers of smoking, from as far back as 2012.

Australia was the first country that adopted this strategy and 2017 data from the Australian Secondary Student’s Alcohol and Drug Survey had shown that from 2011 to 2014 the number of 12 to 17 year-old students who had never smoked, increased from 77.4% to 80.5%.

Moreover, smoking rates for people aged 14 and above, had also dropped from 15.1% to 12.8% between 2010-13, which resulted in 200,000 less smokers in this age group.

Between 2013 and 2016 smoking rates had gone back up by 21,000

However, further data released in the same year, sadly indicated that in the years that followed, smoking rates started increasing again. Figures obtained from the Australian Institute of Health and Welfare had indicated that the rates had risen by over 21,000 to 2.4 million, between 2013 and 2016.

“For the first time ever, there has been no statistically significant reduction in the smoking rate, and an increase in the number of smokers in Australia,” said Colin Mendelsohn, a public health expert from the University of New South Wales, whilst pointing out that for the first time, the smoking rates in Australia had exceeded those in the US. “This is despite plain packaging and the most expensive cigarette prices in the world.”

Plain packaging may have been counterporductive to reducing smoking rates

Once brand loyalty no longer made sense, most smokers decided to make choices based on price.

Sadly, recent research by James Cook University is once again indicating an increase in cigarettes’ consumption. Interestingly, Associate Professor Riccardo Welters, Head of Economics and Marketing at JCU, who was part of the study, believes that actually plain packaging regulations may have been counterproductive.

“Tobacco use is the leading preventable cause of death in the world and as part of an effort to diminish its effects the Australian government eliminated every form of branding and promotion of cigarettes. They removed all logos and trademarks on packets and required all packaging to be a uniform olive-green colour,” said Welters.

“We wanted to explore how plain packaging affects smoking expenditure, smoking quantity and smoking prevalence, so we could get a better picture of the impacts of plain packaging,” he added.

Once brands were removed, smokers made choices based on price

The researcher said that the study participants reported that the removal of branding somehow reduced the quality of their smoking experience, making their preferred cigarettes seem as of lower quality, worse taste, less satisfying and more harmful.

To this effect, most smokers decided they may aswell switch to the cheapest brands on the market, as once brand loyalty no longer made sense, they were instead making purchasing decisions based solely on price. “It appears smokers switched from more expensive to cheaper cigarettes, reducing their overall tobacco expenditure. However, as smoking became less costly, smokers consumed more cigarettes,” said Welters.

“Smoking prevalence overall has been going down for a while, but on average, current smokers are inhaling 6.49 equivalent cigarettes per week more than the predicted trends. Annually, this equates to more than 330 additional cigarettes purchased and consumed by each smoker each year in excess of what we would expect,” said Dr Welters.

Prices should be streamlined

In light of these findings, concluded the professor, policymakers should consider measures, such as taxes or price floors to streamline prices. “These taxes and price floors would help to equalise tobacco prices and remove the incentive to substitute. This would also eliminate the growing ‘discounted’ tobacco market, and cause a reduction in intake.”

Read Further: Mirage

Big Tobacco Uses Gimmicks to Bypass Plain Packaging Rules

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