13.3 The price of tobacco products in Australia

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As in other industries, the costs of raw materials, manufacturing, promotion and distribution of tobacco products are important in determining profits to tobacco growers, manufacturers, wholesalers and retailers. However, because tax is such a substantial component, the level and nature of tobacco duties, fees and taxes–rather than production and marketing factors–have generally been the main determinants of the final retail price of cigarettes over time in Australia as in most developed countries.

This section examines the extent to which increases in tobacco taxes have resulted in rises in the price of cigarettes and other tobacco products in Australia. It outlines efforts by manufacturers to reduce the impact of increases in taxes, both by minimising tax liability and by encouraging discounting at the retail level.

13.3.1 Recommended retail price of tobacco products

Since 1940, the NSW Retail Tobacco Traders' Association has been printing and distributing to small retailers in all states and territories lists of the wholesale and recommended retail prices for virtually all cigarettes, cigars, pipe and roll-your-own tobacco sold in Australia.1–3 i Copies of the publication preserved at the National Library of Australia and several other libraries throughout the country provide recommended prices for any tobacco product available for sale in any state or territory since that date.

13.3.1.1 Changes over time in the recommended retail price of a standard pack

Prices for Craven A cork tip 20s, a brand of cigarettes popular in the 1940s, '50s and '60s in Australia, and one of a handful of brands available in 1940 that was still available in 2012ii, are listed in Table 13.3.1. When examining the cost of tobacco products over time, it is useful to take into account the effects of inflation–the costs of buying all goods and services. Table 13.3.1 also indicates the price adjusted to take into account changes in the Consumer Price Index (CPI). (The CPI uses 1989–90 as the base year, the year when the index is set to 100, so it is convenient to express prices in 1989–90 dollars. This table also expresses the price in 2000 dollars.)

Table 13.3.1
Price of a packet of 20 Craven As, Australia, 1940–80, selected years, then 1980–2012

Year

Price pxer pack ($)
(current dollars*)

Price per pack ($) (1989–90 dollars)

Price per pack ($) (2000 dollars)

1940

1 shilling sixpence (15 cents)

3.75

 


1948

2 shillings threepence (23 cents)

3.46

 


1950

2 shillings fivepence (24 cents)

3.22

 


1955

2 shillings ninepence (28 cents)

2.40

 


1960

3 shillings twopence (32 cents)

2.37

 


1965

3 shillings sixpence (38 cents)

2.57

 


1970

0.39

2.26

3.86

1975

0.63

2.34

3.99

1980

1.02

2.26

3.84

1981

1.05

2.12

3.62

1982

1.31

2.40

4.09

1983

1.31

2.15

3.67

1984

1.54

2.37

4.03

1985

1.65

2.43

4.14

1986

1.89

2.57

4.38

1987

2.13

2.65

4.51

1988

2.28

2.64

4.50

1989

2.44

2.64

4.49

1990

2.80

2.80

4.77

1991

3.01

2.86

4.87

1992

3.42

3.19

5.43

1993

4.15

3.83

6.52

1994

4.37

3.96

6.74

1995

4.50

3.95

6.73

1996

5.08

4.28

7.29

1997

5.90

4.91

8.35

1998

6.10

5.07

8.64

1999

6.40

5.25

8.95

2000

6.80

5.45

9.28

2001

7.95

6.01

10.24

2002

8.25

6.07

10.33

2003

8.60

6.14

10.45

2004

8.75

6.10

10.39

2005

9.70

6.60

11.24

2006

10.25

6.76

11.51

2007

10.36

6.64

11.30

2008

10.72

6.64

11.31

2009

11.60

6.97

11.87

2010

12.68

7.45

12.68

2011

15.52

8.84

15.05

2012

10.36

6.64

 


Sources: NSW Retail Traders' Association 1940 and 1948;1 1950 1955 1960 and 1965;2 1970 and 1975;4 and 1980 to 20125–9

* Current price: the price in the applicable year; no adjustment has been made for inflation

Figure 13.3.1 plots the price of Craven As in $1989–90 at five-year intervals between 1940 and 2010.

 

Figure 13.3.1.jpg

Figure 13.3.1
Price of Craven A 20s, Australia, 1940–2010

Sources: NSW Retail Tobacco Traders' Association 1940 and 1948;1 1950 1955, 1960 and 1965;2 1970 and 1975;4 1980 and 1985;5 1990 and 1995,6 2000 and 20057 and 201010

Note: Dollar rate expressed in 1980–90 dollars

Table 13.3.1 shows that the price of a packet of Craven As increased 85-fold between 1940 and 2010. However, as is evident from Table 13.3.1 and Figure 13.3.1, adjusting for inflation, Craven As cost no more in the early 1990s than they did in real terms during and immediately after the Second World War. Prices increased substantially from the early 1990s. In real terms the price in 2010 was almost double what it was in 1940–a real price increase of 99%.

13.3.1.2 The large pack: a peculiarly Australian phenomenon

In response to rising awareness about health effects and the introduction and steady increase in state business franchise fees on tobacco, over the 1960s, 1970s and 1980s manufacturers introduced many new brands and variants of existing brands that differed in the amount of tar measured and the number of cigarettes in each pack.

Most cigarettes were unfiltered in the early part of the century but by the end of the 1960s most were sold with filters. Cigarettes in the early part of the century were also commonly sold in packets of 10 or 20 or in tins of 50. These were similar in size to the tins in which loose tobacco was commonly sold. With the advent of plastic wrapping, however, these tins disappeared and by 1960 the vast majority of cigarettes were sold in packets of 20. The increasing rate of state licence fees had a significant impact on the price of brands that were popular until the early 1970s. However the tobacco industry fought back to retain its customers and the introduction of Winfield 25s '5 smokes ahead of the rest' in 1976 marked the advent of the large pack size in Australia.

Until 1999, Australia was virtually the only country in the world that combined an excise based on weight and ad valorem fees based on wholesale value of sales. Until 1999, lighter cigarettes attracted less federal excise and customs duty than heavier cigarettes. This effect was amplified by the manner in which ad valorem fees were imposed and final retail price calculated, providing an incentive for lighter cigarettes and for packaging many cigarettes in the same packet.11 The introduction of large pack sizes in Australia closely followed the introduction in 1975 and the subsequent doubling in about 1987 of state franchise fees throughout Australian states. In most other countries in the world, cigarettes are virtually always sold in packets of 20.

While the price per stick of the most popular brand rose quite sharply as a result of a number of increases in duty and state licence fees on tobacco, the price per stick of the cheapest pack on the market (Winfield 25s in the 1970s, Peter Jackson 30s in the 1980s, Longbeach 40s briefly in the 1990s and then Holiday 50s) increased only in line with the CPI.

Not surprisingly, large packs quickly became a dominant component of the market (see Figure 13.3.2).

 

Figure 13.3.2.jpg

Figure 13.3.2
Market share for 20s, 25s and larger pack sizes in Australia, 1981 to 1997 (% of total sales)

Sources: NSW Retail Tobacco Traders' Association;5, 6 Euromonitor International 201212

Notes: Using Nielsen data for the months November and December (all sectors), published irregularly in The Australian Retail Tobacconist;5,6 for the 12 months to September 1997, grocery only Retail World, 24 December 1997

While the recommended retail prices of premium brands of cigarettes such as Marlboro, Dunhill, Benson and Hedges and Craven A rose steadily from the early 1980s, consumers concerned about price have always been able to purchase cigarettes that are substantially cheaper per stick.

Figure 13.3.3 plots in more detail the recommended retail price of the leading brand of cigarettes over time, indicating some of the major changes in taxation arrangements between 1940 and 2011, and some of the major innovations with which the industry responded to those changes.

Figure 13.3.3.jpg

Figure 13.3.3
Price of the most popular cigarettes in Australia, 1940–2011 (cents per stick)

Sources: NSW Retail Tobacco Traders' Association 1940 and 1948, 1950s and 1960 to 1966, and 1966 to 2011;1–3 Australian Bureau of Statistics 2012;13 Victorian Office of Prices 199014

Note: Prices expressed in 1989–90 dollars

Once again Figure 13.3.3 shows that the effects of early increases in state licence fees were mitigated by the introduction of larger and larger pack sizes providing cigarettes at a cheaper cost per stick than those available in smaller pack sizes.

It was not until the very large increases in state fees and excise duty in the mid-1990s that cigarettes became significantly more expensive.

Recommended retail prices increased steadily over the late 1990s so that, in real terms, by 2001 the recommended retail price of cigarettes was almost three times greater than what it had been in 1948.

As outlined in Section 13.2.1, health groups argued for reform of tobacco taxes11,15–17–See technical appendix 13.3.1 for further details– and a new system was introduced between 1999 and 2001, after which time the price per stick of cigarettes in large pack sizes became much closer to the price per stick in smaller pack sizes.

Figure 13.3.4 plots price movements since 1990, reflecting the effects of increases in excise duty and state fees throughout the 1990s and the impact of the implementation between November 1999 and February 2001 of the government's new tax system. Note that in this index, all prices are set to 100 in the base year (1990), so that increases are relative to 1990 prices for the same brand.

 

Figure 13.3.4.jpg

Figure 13.3.4
Cigarette price movements in Australia, 1990–2011 (NB: this is an index rather than actual prices, with all notional prices set to 100 at 1990)

Sources: Australian Bureau of Statistics 2021 13 Table 18; NSW Retail Tobacco Traders Association 2000s and 19997,19

Figure 13.3.4 shows that between 1990 and 2001 cigarette prices increased well above the inflation rate. The biggest increases occurred in the cheapest and most popular brands corresponding with the change to the per stick system in 1999 and the introduction of the GST in July 2001. Between 1998 and 2001, prices of value brands of cigarettes increased between 30% and 40%.20

While prices of cheapest and premium brands rose in parallel in the early 1990s, from 1999 the cheapest brands increased to a much larger extent than the premium brands, thus demonstrating the effectiveness of the November 1999 tax reforms.

With the pack price for Horizon and Holiday 50s approaching $30 in April 2012 (Table 13.3.2 and Figure 13.3.5), it seems that the dominance of large packs in Australia may have ended. In February 2012, it cost almost $13 more to buy a pack of 50s than a pack of 25s.

Table 13.3.2
Retail prices of leading brands, Melbourne, Australia, April 2012: recommended retail price and supermarket price per pack, and per stick and per pack price differential between largest and smallest pack size

 


Winfield 25s

Peter Jackson 30s

Benson & Hedges 25s

Longbeach 40s

Horizon 50s

Holiday 50s

% largest pack size cheaper per stick

$ difference highest to lowest cost

 


$*

 


 


Feb-90

2.94

3.14

3.20

3.08

 


 


 


 


Feb-91

3.08

3.32

3.68

3.47

 


3.57

–51

0.60

Feb-92

3.57

3.87

4.56

4.25

4.68

4.56

–50

0.99

Feb-93

4.45

4.85

4.84

5.86

6.75

6.65

–31

2.30

Feb-94

4.72

5.22

5.20

6.39

7.42

7.19

–31

2.70

Feb-95

5.11

5.66

6.57

7.01

8.25

7.91

–40

3.14

Feb-96

6.47

7.15

6.70

9.01

10.39

9.70

–28

3.92

Feb-97

6.53

7.22

6.90

8.76

10.52

9.65

–30

3.99

Feb-98

6.70

7.4

6.90

9.00

10.80

9.90

–28

4.10

Feb-99

7.05

7.81

7.50

9.51

11.45

10.55

–30

4.40

Feb-00

7.35

8.41

8.95

10.81

13.13

12.75

–29

5.78

Feb-01

8.70

9.95

8.95

12.75

15.42

15.00

–16

6.72

Feb-02

9.10

10.45

9.35

13.25

16.10

15.60

–17

7.00

Feb-03

9.50

10.85

9.80

13.70

16.65

16.15

–18

7.15

Feb-04

9.85

11.25

10.15

14.25

17.35

16.40

–19

7.50

Feb-05

10.30

11.7

10.60

14.95

17.95

17.50

–17

7.65

Feb-06

10.70

11.99

11.05

15.25

18.60

18.15

–18

7.90

Feb-07

11.25

12.6

11.55

15.95

19.45

19.00

–18

8.20

Feb-08

11.70

13.1

12.00

16.70

20.30

19.85

–17

8.60

Feb-09

12.40

13.85

12.70

17.50

21.30

21.25

–16

8.90

Feb-10

12.95

14.45

13.40

18.10

22.10

21.90

–18

9.15

Feb-11

16.45

18.25

16.85

23.10

27.75

27.55

–18

11.30

Feb-12

17.15

18.9

17.95

24.80

29.80

29.80

–17

12.65

Sources: NSW Retail Tobacco Traders' Association 1990s6 and 2000s7–10 and author calculations

* In current dollars: the price in the applicable year; no adjustment has been made for inflation

 

Figure 13.3.5.jpg

Figure 13.3.5
Recommended retail price of top five-selling brands of cigarettes, February 1970 to February 2012

Sources: NSW Retail Tobacco Traders' Association 1990s6 and 2000s7,10,8,9 and author calculations

* In current dollars: the price in the applicable year; no adjustment has been made for inflation

 

Figure 13.3.6.jpg

Figure 13.3.6
Percentages of sales of each pack size of cigarettes in Australia 1981 to 2010–20s, 25s, 30s and 35s, 40s and 50s

Sources: Nielsen data for sales in November and December, published irregularly in The
Australian Retail Tobacconist;5,6 12 months to September 1997, Grocery only, Retail World 24 December 1997, Eurormonitor 201021 and 201212

Sales of larger pack sizes in Australia in 2010 were lower than they had been since any time before they first emerged in the mid-1980s–refer Table 13.3.3.

Table 13.3.3
Percentages of sales of each pack size of cigarettes in Australia 1981 to 2010–20s, 25s, 30s and 35s, 40s and 50s

 

20s

25s

30s and 35s

40s

50s

30s to 50s

1981

37.3

62.1

     

0

1985

22.6

47.1

29.1

   

29.1

1987

13

48.3

37.1

   

37.1

1990

6.7

41.8

37.3

14.2

 

51.5

1993

4.6

35.2

20.7

19.1

19

58.8

1997

2.1

29.8

21.5

23.3

23.3

68.1

2001

11.5

37

23

15.5

13

51.5

2004

13.5

39.5

22

14.5

10.5

47

2007

15

43.5

21.5

11.5

8.5

42.5

2010

15.9

44.7

21

10.6

7.8

39.4

Source: Nielsen data for sales in November and December, published irregularly in The Australian Retail Tobacconist;5,6 12 months to September 1997, Grocery only, Retail World 24 December 1997, Euromonitor 201021 and 201212

Use of packs of 30s and 35s also declined among secondary school students although there has been little change in the proportion of regular student smokers using 40s and 50s–see Figure 13.3.7.

 

Figure 13.3.7.jpg

Figure 13.3.7
Students preferring large pack sizes (30, 35, 40 or 50), secondary school students 12–17 years who smoked in last week–1996, 1999, 2002, 2005, 2008 and 2011 (%)

Sources: White V personal communication, using data from surveys of secondary school students reported in Hill, White and Effendi;22 and White and Hayman 2004,23 2006,24 White and Smith 200925 and White and Bariola 201226[multiple responses allowed]

Between 1999 and 2002, during the period of reform of the tax system, the percentages of secondary school students using large packs declined by about 18%, which included a 29% reduction in the percentage of teenage smokers preferring 40s, and a 32% reduction in the percentage preferring 50s.

 

Figure 13.3.8.jpg

Figure 13.3.8
Students preferring large pack sizes (30, 35, 40 or 50), secondary school students 12–17 years who smoked in last week–1996, 1999, 2002, 2005, 2008 and 2011(%)

Sources: White V personal communication, using data from surveys of secondary school students reported in Hill, White and Effendi;22 and White and Hayman 2004,23 2006,24 White and Smith 200925 and White and Bariola 201226

13.3.2 Prices at which tobacco products are sold/purchased

Working out the price of cigarettes and other tobacco products is by no means a straight-forward matter. The prices at which cigarettes are offered for sale may differ significantly from those recommended by manufacturers. Many different brands of cigarettes are sold–more than 50 in Australia in 20129–from many different outlets–there were more than 35 000 outlets in Australia in 2004.27,28 Some types of outlets are more likely to sell at discounted prices, but not all brands are discounted to the same extent within the same periods of time. Obtaining a representative sample of prices for even a single brand over time would be a costly exercise. Obtaining a representative sample of prices for a large number of brands is simply not feasible.iii Many researchers attempt to address this difficulty by using prices of just the brand of cigarettes most popular in the population they are studying, but this may not give a picture representative of the entire cigarette market due to consumers seeking to minimise costs by shifting to cheaper brands or pack sizes, bulk purchasing, or shopping at lower-cost outlets.

In the study by Ross and Chaloupka29 discussed in Section 13.1.5 above, the average cost of cigarettes in a particular state (as calculated by industry sales records) correlated only weakly with the cost (in their local store) of the brand of cigarettes preferred by secondary school students. The study found that consumption fell much more dramatically in response to changes in prices reported by teenagers than to changes in state-average cigarette prices. The choice of indicator for price may critically affect the outcome of research on price effects, and, as demonstrated in Section 13.3.1.2, the pricing policies adopted by companies may undermine the effectiveness of tax policy as a means of discouraging tobacco consumption.

13.3.2.1 The Cigarettes and Tobacco Sub-group of the Consumer Price Index

The longest-running indicator available of the actual price of cigarettes for sale in Australian shops is provided by the component of the Tobacco and Alcohol Sub-Index of the CPI that covers tobacco products.iv The CPI and its sub-indexes are constructed each quarter by the Australian Bureau of Statistics in in-shop surveys monitoring a 'basket' of goods that might be purchased by a typical Australian household.30 Table 13.3.4 shows the average index figure for the Cigarettes and Tobacco Sub-group of the Tobacco and Alcohol Sub-index of the CPI for each year since it was first published in 1973.

Table 13.3.4
Cigarettes and Tobacco Sub-group of the Tobacco and Alcohol Sub-index of the CPI, average all capital cities, all quarters, 1973–2011 (annual average index figure)

Year ending June

Cigarettes and Tobacco
Sub-group of CPI

Year ending June Cigarettes and Tobacco
Sub-group of CPI
Year ending June Cigarettes and Tobacco
Sub-group of CPI

1973

14.8

1986

66.7

1999

249.3

1974

16.3

1987

74.8

2000

268.2

1975

19.4

1988

81.0

2001

320.1

1976

24.2

1989

88.7

2002

343.5

1977

26.5

1990

100.0

2003

358.5

1978

27.3

1991

112.8

2004

374.3

1979

31.0

1992

124.0

2005

388.5

1980

33.7

1993

149.4

2006

405.35

1981

35.4

1994

171.0

2007

423.1

1982

38.4

1995

186.1

2008

438.1

1983

45.0

1996

222.8

2009

464.3

1984

54.5

1997

232.1

2010

496.2

1985

59.7

1998

239.8

2011

608.6

Sources: Australian Bureau of Statistics 201230

Note: Cigarettes and Tobacco Sub-group averaged for each year

Figure 13.3.9 plots the Cigarettes and Tobacco Sub-group of the CPI against the overall index since 1973.

 

Figure 13.3.9.jpg

Figure 13.3.9
The Consumer Price Index, 1973–2011: Cigarettes and Tobacco Sub-group compared with overall index

Sources: Australian Bureau of Statistics 201213

Note: Consumer Price Index and CPI Cigarettes and Tobacco Sub-group18

It is evident from Table 13.3.4 and Figure 13.3.9 that prices as determined in the Australian Bureau of Statistics price survey have risen significantly over time, and have been well above increases in other goods and services since the early 1990s. Prices rose above CPI even between 2001 and 2009, during which time the excise and customs duty on tobacco products was increased only in line with the CPI, indicating increased margins to manufacturers and retailers (and also to state governments in GST revenue).

13.3.2.2 Discounting in the tobacco market

While many small retailers such as proprietors of local corner storesv and fast-food outlets sell cigarettes at the recommended prices, the majority of cigarettes in Australia are sold at considerably lower prices. As well as selling single packets of cigarettes at well below the recommended prices, most supermarkets and tobacconists also sell cigarettes in cartons at a discounted rate. In its 1994 report on the cigarette industry, the Prices Surveillance Authority noted various common forms of discounting, including lower prices for stock bought in high volumes, and the phenomenon of 'specialling' where manufacturers encourage high-volume retailers (especially tobacconists and supermarkets) to discount one or two of that company's brands for a week or longer periods.31

An in-shop study undertaken through the period May 1997 to February 2001 by the Centre for Behavioural Research in Cancer32 indicated significant discounting of cigarettes over that period. The study surveyed the pack and carton prices of the five most popular brands of cigarettes in each state in a selection of all the major types of stores in a sample of suburbs in each major urban centre throughout Australia. On average, cigarettes in Australia were sold at 5.75% lower per stick than the recommended retail price, with considerable variation between brands and outlet types. Average discounting ranged from 4.4% for Benson and Hedges 25s to 6.8% for Horizon 50s. Petrol stations tended to sell cigarettes at slightly higher than the recommended retail price (about 0.3% higher across the study period) but discounting was common in supermarkets and tobacconists (with an average discount of 9.3% and 10.9% respectively). Per stick prices of cigarettes sold in cartons were about 14% lower than those sold in single packs.

Table 13.3.5 sets out the retail prices of a number of popular brands, comparing the recommended retail price with pack and carton prices as at April 2012 at one of Australia's major supermarkets.

Table 13.3.5
Retail prices of leading brands, Melbourne, Australia, April 2012: recommended retail price and supermarket price per pack, per carton and per stick

Selection of most popular
brands in Australia

Recommended retail price

Supermarket price

Per stick

Per pack

Per pack

Per stick price in cartons

Per carton

% by which supermarket carton price is cheaper per stick stick/carton

 


$*

 


Winfield Blue 25s, hardpack

0.6900

17.15

17.11

0.6633

132.65

–3.9

Peter Jackson Rich 30s hardpack

0.6300

18.9

16.11

0.6065

109.17

–3.7

Benson & Hedges Smooth 25s hardpack

0.7200

17.95

17.67

0.7267

145.34

0.9

Dunhill Distinct 25s hardpack

0.7200

17.95

17.63

0.6786

135.72

–5.8

Longbeach Rich 40s hardpack

0.6200

24.8

25.12

0.6044

96.71

–2.5

Marlboro Gold 25s

0.7200

17.95

17.77

0.6862

137.24

–4.7

Horizon Blue 50s

0.6000

29.80

28.03

0.5382

107.64

–10.3

Sources: Convenience and Impulse Retailing 2009,33 NSW Retail Tobacco Traders' Association 2012,9 and Woolworths 201234

* In current dollars: the price in the applicable year; no adjustment has been made for inflation

13.3.2.3 Prices paid as reported by smokers

An alternative approach to calculating prices of tobacco products is to ask smokers what they paid for their last packet of cigarettes or smoking tobacco. While not suitable for all research purposes, such data do provide very accurate information about price as actually experienced by consumers.

Studies based on interviews with US tobacco users have indicated significant recent increases in the percentages of smokers turning not just to cheaper brands, but also to cheaper forms of tobacco (roll-your-own and chewing tobacco); cartons in preference to packets; discount outlets; and, where this is convenient, duty-free and illicit tobacco products.35 In Australia, following the abolition of state business franchise fees on tobacco, there was a similar shift to roll-your-own including illicit 'chop-chop' (see Section 13.7), and to cartons and to discount outlets.36 Changes to tobacco taxes in 1999 made it much less attractive for smokers to turn to larger pack sizes and budget brands as a means of cushioning themselves from tax increases, and as intended, following introduction of reforms, smokers shifted back to smaller pack sizes with a lower up-front purchase price.20 An annual survey undertaken to track the effects of the National Tobacco Campaign provides data on prices paid by Australian smokers between 1997 and 2000.32 Comparing the results of this survey with the data collected in the price monitoring survey, it is clear that a significant proportion of smokers in Australia must be purchasing cigarettes at discounted prices.

Figure 13.3.10 plots the recommended retail price of Peter Jackson 30s, one of the top-selling brands, against the average reported prices paid by a representative sample of consumers. It also plots the average price of Peter Jackson 30s observed in the price monitoring survey when purchased in packs from convenience stores and when purchased in cartons in discount stores.

 

Figure 13.3.10.jpg

Figure 13.3.10
Price of one Peter Jackson 30s cigarette, 1997–2000, Australia: recommended retail price, monitored price and price reported paid by smokers

Sources: NSW Retail Tobacco Traders' Association 1990s and 2000s;6, 7 Scollo et al 200320

Note: In current dollars: the price in the applicable year; no adjustment has been made for inflation

As is evident from Figure 13.3.10, the actual price that consumers report they pay is significantly lower than the recommended retail price and the average price of packets of cigarettes sold in convenience stores. It is much closer to the average price of packets sold in cartons from discount outlets.

Technical attachment 13.3.2 sets out data on prices paid for nine different brands of cigarettes collected from Australian smokers interviewed as part the International Tobacco Control Policy Evaluation Study for the years 2002–10.37 Figure 13.3.11 plots the average reported prices paid for all brands (weighted by brand share) against average recommended retail prices (weighted for brand share and not weighted).

 

Figure 13.3.11.jpg

Figure 13.3.11
Recommended retail prices per cigarette of leading brands in 2002–10 versus reported prices paid by consumers (cents per stick)

Sources: NSW Retail Tobacco Traders' Association 2000s;7 Email to Michelle Scollo, Cancer Council Victoria, 2006, from Li Q, Roswell Park Cancer Institute Buffalo, NY, on prices of Australian cigarettes from Waves 2 to 4 of the International Tobacco Control Policy Evaluation Study and by Timea Partos, Cancer Council Victoria, Waves 5 to 10, 2012

Note: In current dollars: the price in the applicable year; no adjustment has been made for inflation

Between 2002 and 2010, the prices reported paid by consumers continued to be substantially lower than those recommended by retail trade associations.

While it is possible that consumers misremember and round down prices, clearly the recommended retail prices overestimate the actual prices paid by consumers. Indexes such as the CPI based on price monitoring surveys may also significantly overestimate prices experienced by consumers unless sampling is adjusted to take account of changing sales patterns, in particular those reflecting consumer efforts to seek lower prices.

13.3.3 International comparisons of the price of tobacco products

To accurately assess the pricesvi of Australian cigarettes compared with those sold in other countries, it is important to use consistent methods for collecting price data. Estimated prices for a single country will vary widely depending on the brand and brand variant selected and the sorts of retail outlets from which data are collected.

13.3.3.1 International comparisons of cigarette prices

Many different brands of cigarettes are sold in any country, but Philip Morris' Marlboro is one brand that is sold in just about every country in the world. Figures 13.3.12 and 13.3.13 show data from the Economist Intelligence Unit, which surveys the price of a range of consumer products twice each year in most major cities throughout the world. Figure 13.3.12 shows the price (expressed in US dollars) of a typical pack of cigarettes sold in a sample of moderately priced stores in 33 major capital cities in 2010. In many countries, Marlboro is seen as a luxury brand, and the majority of smokers regularly use much cheaper locally produced brands. Figure 13.3.13 shows the prices in 2011 of Marlboros in moderately priced stores and the price charged by supermarkets for the most popular brand of cigarettes in each of a number of cities comparable with major Australian capital cities.

 

Figure 13.3.12.jpg

Figure 13.3.12
Prices of cigarettes sold in selected cities around the world, 2010: typical local brand, 20s, as sold in supermarkets

Sources: Eriksen, Mackay and Ross 201238 using data from Economic Intelligence Unit 201039

Note: In current US dollars: the price in the applicable year; no adjustment has been made for inflation

 

Figure 13.3.13.jpg

Figure 13.3.13
Prices of cigarettes sold in selected cities around the world, 2011: standard pack of Marlboro 20s in moderately priced stores and typical local brand, 20s, as sold in supermarkets

Source: Economic Intelligence Unit 201240

Note: In current US dollars: the price in the applicable year; no adjustment has been made for inflation

Marlboro cigarettes in Australia were among the most expensive in the world in 2011, cheaper only than Marlboros sold in the Oslo. The most popular brand of 20s sold in Australia also appears to be more expensive that the most popular brand in every other country other than Norway.vii

13.3.3.2 International comparisons of prices paid

The International Tobacco Control Policy Evaluation Study provides ongoing data for the countries involved in the study, on a range of tobacco-control policy indicators, including the type of venue from which smokers purchased cigarettes and what they paid.41 Analysis of data from the first two waves of the study (between October and December 2002, and then May to July 2003) shows that, while Australian smokers were much less likely to purchase from untaxed sources, they were much more likely to purchase from groceries and other discount stores in preference to petrol stations and other convenience stores. The average price per stick paid by smokers in each country in phase two of the study–excluding prices paid for untaxed cigarettes–adjusted to 2002 US dollars–were 35c in the UK, 23c in Canada and the US, and 20c in Australia.

 

i A small number of brands (such as Tradition, Deal, Harvest and Bayside are sold only from Coles, produced under special arrangement with a manufacturer in Germany.

ii Other brands available over the entire period include Ardath, Black and White, Camel, Dunhill, Du Maurier, Kool and Lucky Strike. Craven A cork-tipped was replaced by Craven A classic in 2005 and removed from retail price lists in 2006. From 2006, Craven A was only available with filters. From 2007 it was available only in packs of 25.

iii In the US, tobacco companies publish detailed information on the average price of each brand based on sales data.

iv Cost-of-living surveys published at various times have tracked the price of a single brand of cigarettes, but none of these has been regular and long-running.

v Known in various Australian states as milk bars, dairies or delicatessens

vi This section concentrates on prices only. For a full understanding of the costliness of cigarettes in Australia compared to cigarettes in other countries, see also Section 13.4.3. This assesses the relative affordability of cigarettes in different countries, examining prices relative to the cost of other goods and to income-earning capacity.

vii The price of the top-selling brand of cigarettes in Sydney, Melbourne, Perth and Brisbane is probably somewhat overstated in this survey, because it is based on the price of a pack of 20s. In Australia, the vast majority of smokers would be buying cigarettes in packets of 25 or 30 rather than 20 which, even after the excise reforms in 1999, would still be somewhat cheaper per stick than cigarettes sold in 20s.

References

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2. NSW Retail Tobacco Traders' Association. Price lists--cigarettes. The Retail Tobacconist 1950s and 1960 to 1966;11 to 27(February editions):x-x.

3. NSW Retail Tobacco Traders' Association. Price lists--cigarettes. The Australian Retail Tobacconist 1966 to 2012;27 to 84(February then Feb-April editions):x-x.

4. NSW Retail Tobacco Traders' Association. Price lists--cigarettes. The Australian Retail Tobacconist 1970s;31 to 40(February editions):x-x.

5. NSW Retail Tobacco Traders' Association. Price lists--cigarettes. The Australian Retail Tobacconist 1980s;41 to 50(February editions):x-x.

6. NSW Retail Tobacco Traders' Association. Price lists--cigarettes. The Australian Retail Tobacconist 1990s;51 to 59(February editions):x-x.

7. NSW Retail Tobacco Traders' Association. Price lists--cigarettes. The Australian Retail Tobacconist 2000s;60 to 79(February editions):x-x.

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11. Scollo M. Closing the Loophole--The Need for Action in 1997. Melbourne, Australia: Anti-Cancer Council of Victoria, 1996.

12. Euromonitor International. Tobacco in Australia, Global Market Information Database, 2010. London: Euromonitor International, 2012. Updated January 2012 [viewed April 2012] . Available from: http://www.euromonitor.com

13. Australian Bureau of Statistics. 6401.0 Consumer Price Index, Australia, Table 1B CPI: All groups, Index numbers and percentage changes. Canberra: ABS, 2012. Available from:
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14. Victorian Office of Prices. Does Smoking Make Cents. Melbourne, Australia: Victorian Smoking and Health Program, 1990.

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16. Australian Council on Smoking and Health, Australian Cancer Society, National Heart Foundation of Australia and Anti-Cancer Council of Victoria et al. Tobacco Taxes: a case for action. A submission to the Australian Federal Government. Perth: ACOSH, 1992.

17. Australian Council on Smoking and Health, Australian Cancer Society, National Heart Foundation of Australia and Anti-Cancer Council of Victoria et al. Tobacco excise duties. Submission to the Australian Federal Government. Perth: ACOSH, 1994.

18. Australian Bureau of Statistics. 6401.0 Consumer Price Index, Australia Table 13 CPI. Groups, subgroups and expenditure class, index numbers by capital city. Canberra: ABS, 2012. Updated August 2006. Available from: http://www.ausstats.abs.gov.au/ausstats/abs@archive.nsf/0/E601732287138052CA257211002059F1/$File/640109.xls

19. NSW Retail Tobacco Traders' Association. Price lists--cigarettes. The Australian Retail Tobacconist 1999;59(no. 9 November):3-6.

20. Scollo M, Younie S, Wakefield M, Freeman J and Icasiano F. Impact of tobacco tax reforms on tobacco prices and tobacco use in Australia. Tobacco Control 2003;12(suppl. 2):ii59–66. Available from: http://tc.bmjjournals.com/cgi/content/abstract/12/suppl_2/ii59

21. Euromonitor International. Tobacco – Australia, September. London: Euromonitor International, 2010. [viewed March 2011] . Available from: http://www.euromonitor.com/tobacco

22. Hill D, White V and Effendi Y. Changes in the use of tobacco among Australian secondary students: results of the 1999 prevalence study and comparisons with earlier years. Australian and New Zealand Journal of Public Health 2002;26(2):156–63. Available from: http://www.phaa.net.au/anzjph/journalpdf_2002/april_2002/p.%20156-63.pdf

23. White V and Hayman J. Smoking behaviours of Australian secondary school students in 2002. National Drug Strategy monograph series no. 54. Canberra: Australian Government Department of Health and Ageing, 2004. Available from: http://www.nationaldrugstrategy.gov.au/internet/drugstrategy/publishing.nsf/content/mono54

24. White V and Hayman J. Australian secondary school students' use of alcohol in 2005. Report prepared for Drug Strategy Branch, Australian Government Department of Health and Ageing. National Drug Strategy monograph series no. 58. Melbourne: Centre for Behavioural Research in Cancer, Cancer Control Research Institute, The Cancer Council Victoria, 2006. Available from: http://www.nationaldrugstrategy.gov.au/internet/drugstrategy/publishing.nsf/Content/mono58

25. White V and Smith G. 3. Tobacco use among Australian secondary students. Australian secondary school students' use of tobacco, alcohol, and over-the-counter and illicit substances in 2008. Canberra: Drug Strategy Branch Australian Government Department of Health and Ageing, 2009. Available from: http://www.nationaldrugstrategy.gov.au/internet/drugstrategy/Publishing.nsf/content/school08

26. White, V. and E. Bariola, 3. Tobacco use among Australian secondary students in 2011, in Australian secondary school students' use of tobacco, alcohol, and over-the-counter and illicit substances in 2011 2012, Drug Strategy Branch Australian Government Department of Health and Ageing: Canberra http://www.nationaldrugstrategy.gov.au/internet/drugstrategy/Publishing.nsf/content/school11

27. PricewaterhouseCoopers. Sales of cigarettes and tobacco products by type of retail business. An analysis of sales of cigarettes and tobacco products to tobacco retailers in Australia. Document tabled as part of a formal submission (no. 46) made by British American Tobacco Australia in relation to the Inquiry into Tobacco Smoking in New South Wales in 2006. Sydney: PricewaterhouseCoopers, 2005. Available from: http://www.parliament.nsw.gov.au/prod/parlment/committee.nsf/0/2b14b998dda58536ca2571620017ecd2/$FILE/Sub%2046%20BATA%20-%20Attachment%202.pdf

28. Economic Studies and Strategies Unit. The significance of cigarettes and tobacco products to retailers. Sydney: PricewaterhouseCoopers, 1999. Available from: http://www.parliament.nsw.gov.au/prod/PARLMENT/Committee.nsf/0/2b14b998dda58536ca2571620017ecd2/$FILE/Sub%2046%20BATA%20-%20Attachment%202.pdf

29. Ross H and Chaloupka F. The effect of cigarette prices on youth smoking. Health Economics 2003;12(3):217–30. Available from: http://econpapers.repec.org/article/wlyhlthec/v_3A12_3Ay_3A2003_3Ai_3A3_3Ap_3A217-230.htm

30. Australian Bureau of Statistics. 6431.0 Consumer Price Index: historical weighting patterns, 1948-2011 Canberra: ABS, 2011. Updated 26 October 2011 [viewed 29 April 2012] . Available from: http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6431.01948-2011?OpenDocument

31. Prices Surveillance Authority. Report no. 52: inquiry into cigarettes declaration. Matter no: PI/94/1. Melbourne, Australia: PSA, 1994.

32. Scollo M, Owen T and Boulter J. Price discounting of cigarettes during the National Tobacco Campaign. In: Hassard, K, ed. Australia's National Tobacco Campaign: evaluation report vol. 2. Canberra: Commonwealth Department of Health and Aged Care, 2000. 155-200. Available from: http://www.health.gov.au/internet/main/publishing.nsf/Content/7E318B2BCB5DAE26CA256F190004524F/$File/tobccamp_2-ch5.pdf

33. Convenience & Impulse Retailing. Nielsen convenience and impulse sales report. Balmain, NSW: Berg Bennett, 2009 [viewed 1 July 2011] . Available from: http://www.c-store.com.au/industry/acn/acn2009.pdf

34. Woolworths. Browse aisles. Baulkham Hills, New South Wales: Woolworths, 2012 Last modified May 2012 [viewed 2 May 2012] . Available from: http://www2.woolworthsonline.com.au/#url=/Shop/Department/37%3Fname%3Dtobacco-cigarettes

35. Hyland A, Higbee C, Li Q, Bauer J, Giovino G, Alford T, et al. Access to low-taxed cigarettes deters smoking cessation attempts. American Journal of Public Health 2005;95(6):994–5. Available from: http://www.ajph.org/cgi/reprint/95/6/994

36. Blecher E. A mountain or a molehill: is the illicit trade in cigarettes undermining tobacco control policy in South Africa? Trends in Organized Crime 2010;13(4):299–315. Available from: http://www.springerlink.com/content/q852738qk5761088/

37. Li Q, Roswell Park Cancer Institute Buffalo, NY. Prices of Australian cigarettes from Waves 2 to 4 of the International Tobacco Control Policy Evaluation Study (personal communication). Email to Michelle Scollo of The Cancer Council Victoria, 2006, and data provided to Michelle Scollo by Timea Portos, Cancer Council Victoria 2012.

38. Eriksen M, Mackay J and Ross H. The tobacco atlas. 4th edn. New York and Atlanta, Georgia: World Lung Foundation and American Cancer Society, 2012. Available from: http://www.tobaccoatlas.org/

39. Economic Intelligence Unit. Cigarette prices in selected cities, 2010. London: The Economist, 2011. [viewed 2011] . Available from: http://www.eiu.com/

40. Economic Intelligence Unit. Cigarette prices in selected cities, 2011. London: The Economist, 2012. Updated March 2012 [viewed 20 May 2012] . Available from: http://www.eiu.com/

41. Hyland A, Laux FL, Higbee C, Hastings G, Ross H, Chaloupka FJ, et al. Cigarette purchase patterns in four countries and the relationship with cessation: findings from the International Tobacco Control (ITC) Four Country Survey. Tobacco Control 2006;15(suppl. 3):iii59–64. Available from: http://tc.bmjjournals.com/cgi/content/abstract/15/suppl_3/iii59

42. Beirot C. Tobacco Prices, Taxes and Consumption in Australia. Melbourne, Australia: Victorian Smoking and Health Program, 1993.

43. Hill D, White V and Segan C. Prevalence of cigarette smoking among Australian secondary school students in 1993. Australian Journal of Public Health 1995;19(5):445–9. Available from: http://lib.bioinfo.pl/pmid:8713191

44. Scollo M. Federal excise duty on tobacco--proposals for reform. Melbourne, Australia: Anti-Cancer Council of Victoria, 1998.

45. NSW Retail Tobacco Traders' Association. Price lists--cigarettes. The Australian Retail Tobacconist 2002;62(no. 8/9 Aug-Sep):13-15.

46. NSW Retail Tobacco Traders' Association. Price lists--cigarettes. The Australian Retail Tobacconist 2003;63(no. 8/9 Aug-Sep):6-8.

47. NSW Retail Tobacco Traders' Association. Price lists-cigarettes. The Australian Retail Tobacconist 2003;64(no. 5 Aug-Sep):x-x.

48. NSW Retail Tobacco Traders' Association. Price lists-cigarettes. The Australian Retail Tobacconist 2005;65(no. 5 Aug-Sep):4-8.

49. NSW Retail Tobacco Traders' Association. Price lists-cigarettes. The Australian Retail Tobacconist 2006;66(no. 5 Aug-Sep):3-5.

50. NSW Retail Tobacco Traders' Association. Price lists-cigarettes. The Australian Retail Tobacconist 2007;68(no. 5 Aug-Sep):x-x.

51. NSW Retail Tobacco Traders' Association. Price lists-cigarettes. The Australian Retail Tobacconist 2008;68(no. 5 Aug-Sep):3-6.

52. NSW Retail Tobacco Traders' Association. Price lists-cigarettes. The Australian Retail Tobacconist 2009;72(no.5 Aug-Sep):2-6.

53. NSW Retail Tobacco Traders' Association. Price lists-cigarettes. The Australian Retail Tobacconist 2010;79(no. 6 Nov-Dec 2010 and Jan 2011):1-2.

Technical Appendix 13.3.1 Why health groups were concerned about large pack sizes

Budget brands in Australia were on average about 10% lighter per stick than premium brands, however they attracted almost 20% less tax and were more than 20% cheaper.11 Table TA13.3.1 sets out the recommended price per stick for Rothmans brands in Victoria between 1980 and 1993, together with the weighted average price of all brands in each year, taking into account the actual prices for which cigarettes were sold and the market share of each brand.

Table TA 13.3.1
Recommended price per stick, Rothmans brands Melbourne, Australia, 1980–81 to 1992–93: cigarettes in pack sizes 20, 25, 30, 35, 40 and 50 and weighted average price

 


Recommended price per stick: recommended
retail price divided by number of sticks in pack (cents)*

 


20s

25s

30s

35s

40s

50s

Weighted
average price

1980–81

5.50

4.70

4.67

1983–84

7.50

6.50

5.50

6.70

1986–87

10.90

9.00

7.50

8.68

1987–88

12.10

9.90

8.00

8.10

9.42

1988–89

12.90

10.70

9.00

8.20

7.30

 


10.12

1989–90

14.10

11.76

9.90

9.10

7.80

 


1990–91

16.15

13.72

11.50

10.71

9.42

7.94

12.53

1991–92

16.95

14.40

12.30

11.50

10.80

9.70

13.33

1992–93

20.75

17.00

16.17

14.86

14.85

13.30

16.42

Source: Beirot 199342 Table 5.2 (p32)

* In current currency: the price in the applicable year; no adjustment has been made for inflation

Figure TA13.3.1.1 plots the recommended prices for each price category.

 

Figure TA13.3.1.1.jpg

Figure TA13.3.1
Recommended retail price Rothmans brands, Melbourne, Australia, 1980–81 to 1992–93: cigarettes in pack sizes 20, 25, 30, 35, 40 and 50 (cents per stick)

Source: Beirot C 199342 Table 5.2 (p32)

Note: In current dollars: the price in the applicable year; no adjustment has been made for inflation

As can be seen from Table TA13.3.1.1 and Figure TA13.3.1.1, while the recommended retail price of premium cigarettes sold in packs of 20 rose sharply, manufacturers such as Rothmans were able to cushion consumers by providing cigarettes in larger pack sizes that were substantially cheaper per stick. Each year, when increases in state fees caused a rise in prices, manufacturers introduced a larger pack size that provided more cigarettes at a cost only slightly higher per stick than that of cigarettes in smaller pack sizes prior to the tax increase. Thus the immediate effects of the introduction of and increases in state fees was largely offset by the introduction of larger and larger pack sizes providing cigarettes at a cheaper price per stick.

The same picture can be told in another way, looking at the price of the leading brand, a premium brand and the cheapest brand (cheapest per stick) available on the market (Figure TA 13.3.1.2).

 

Figure TA13.3.1.2.jpg

Figure TA13.3.2
Recommended retail price most popular brands, cheapest brand per stick, Melbourne 1973 to 1992 (using 1973 as index year, = 100 for all indicators)

Source: Updating Beirot 199342

Health groups believed that using large pack sizes may have been a significant factor in the transition from occasional to regular, addicted smoking.

Data from household surveys indicated that smokers of 50s tend to smoke, on average, 60% more cigarettes per week than smokers of 25s (25 compared with 16 cigarettes per day). In their regular survey of secondary school children, Hill and colleagues found that children smoking the large pack sizes smoked about twice the amount smoked by children preferring the smaller pack sizes.43

The degree of risk posed by smoking depends not so much on the weight of tobacco, but rather on the level of dangerous constituents delivered and the duration of smoking.

People who smoke light cigarettes inhale harder to get the same delivery of nicotine and, in the process, also receive more of the substances that cause disease, in particular tar and carbon monoxide. Although they may consume less tobacco in each cigarette, the exposure of budget-brand smokers to carcinogens and other dangerous carcinogens is likely to be higher than that of premium-brand smokers, due both to compensatory smoking and to the greater number of cigarettes consumed. For each cent of tax paid, budget cigarette smokers were receiving much higher exposure levels than were premium-brand smokers.

Duration of smoking has an even greater impact than amount smoked on the risk of dying prematurely. People who smoke light cigarettes in large budget packs handle the pack, light up and draw back more often: the more often these behaviours are repeated, the stronger the smoking habit and the harder it will be to quit. Budget-brand smokers may therefore have been more likely to smoke for a long period, and be at much higher risk of dying prematurely.

Large packs fit less easily into small casual handbags and pockets, so they are often carried in the hand and are therefore much more visible to children. Children's estimates about the prevalence of smoking among young adults are a very strong predictor of them taking up smoking themselves. Large packs are also more likely to be shared among young people, thus increasing the risk of children being pressured to try or even buy cigarettes from their peers.

What was lobbied for? How? What was achieved?

Starting in 1990 when the Victorian Office of Prices first highlighted this problem,14 Australian health agencies argued that the simplest way of reducing the affordability of budget brands would be to levy excise simply on the basis of the number of sticks, with automatic excise increases each six months in line with CPI, with a slightly higher level of duty payable on heavy cigarettes, and with a mechanism for maintaining the relative price of roll-your-own tobacco.15–17

In a shift to a per stick system, there would be small immediate impact on total population tobacco consumption. Once the new system was in force, price-sensitive smokers would no longer have the option of switching to cheaper brands. In the longer term even greater reductions could be expected in response to future tax increases.

Changing the excise duty on tobacco from a weight–to a stick-based system would lead to increases in the price of popular children's brands, and a reduction in differential between budget and premium brands.

Each year between 1991 and 1998, health agencies submitted a proposal to the Federal Treasurer calling for introduction of a per stick system. A per stick system, it was argued, was preferable on health grounds and, along with tobacco tax increases, would raise substantially higher levels of tobacco revenue, even taking into account predicted drops in consumption in budget brands.

In the early 1990s, health group proposals were drafted and submitted to the Federal Treasurer and several of his key Cabinet colleagues, by the Perth-based Australian Council on Smoking and Health.

Limited funds were available for personal representations with politicians or for wider lobbying for the proposal among key party and parliamentary figures.

In 1996, further work was done by the Anti-Cancer Council of Victoria, quantifying the predicted drops in children's consumption of budget brands, and the predicted increases in government revenue.11

During 1996 and 1997 a handful of visits were made to key politicians in support of the proposals, funded mainly by the Australian Cancer Society and the National Heart Foundation of Australia.

Feedback from several politicians and government departmental officials indicated that several key policy personnel had doubts about the likely health impact of this measure. Considerable effort was put into meeting with officials and providing information related to their queries.

At the end of 1997, a significant opportunity arose.

The Coalition government announced that it intended to go to the next election on a platform of major tax reform, the central plank of which would be introduction of a goods and services tax (GST).

The government set up departmental and parliamentary task forces and the business and welfare sectors established several independent and joint committees to help define principles for and build community support for tax reform.

In late 1997, the Victorian Smoking and Health Program developed a comprehensive proposal to put to the government's tax reform task force.44

The proposal was submitted by heart and cancer charities on behalf of almost 60 health and medical groups around the country. In addition to a shift to a per stick tax on cigarettes, the proposal called for imposition of the GST on top of the per stick excise. Adding a GST to the retail cost of tobacco products–with no compensatory decrease in excise duty–would prevent tobacco products becoming more affordable. A GST on tobacco would help to prevent any decrease in consumption (and revenue flow) from any items for which cigarettes acted as a substitute.

Technical appendix 13.3.2 Recommended retail price per stick of leading brands in Australia compared with reported prices paid–Australia 2002 to 2010

Table 13.3.2.1
Recommended prices per stick (cents) top selling Australian cigarette brands 2002 to 2010

 


2002

2003

2004

2005

2006

2007

2008

2009

2010

Winfield 25s

0.3700

0.3860

0.4000

0.4200

0.4380

0.4560

0.4800

0.5020

0.6300

Longbeach 40s

0.3350

0.3475

0.3625

0.3750

0.3888

0.4038

0.4300

0.4425

0.5563

Peter Jackson 30s

0.3533

0.3667

0.3800

0.3950

0.4083

0.4250

0.4500

0.4650

0.5867

Horizon 50s

0.3260

0.3390

0.3510

0.3640

0.3800

0.3930

0.4180

0.4310

0.5360

Benson & Hedges 25s

0.3800

0.3980

0.4120

0.4320

0.4500

0.4680

0.4920

0.5140

0.6480

Holiday 50s

0.3160

0.3280

0.3420

0.3550

0.3710

0.3840

0.4080

0.4270

0.5320

Alpine 35s

0.3800

0.3940

0.4060

0.4220

0.4380

0.4560

0.4820

0.5020

0.6300

Dunhill 25s

0.3840

0.4040

0.4200

0.4400

0.4580

0.4760

0.5020

0.5280

0.6480

Marlboro 25s

0.3800

0.3980

0.4140

0.4320

0.4500

0.4680

0.4920

0.5140

0.6480

Escort 35s

0.3443

0.3571

0.3714

0.3886

0.4057

0.4257

0.4529

0.4629

0.5557

Average all brands (unweighted for RRPs)

0.3569

0.3718

0.3859

0.4024

0.4188

0.4355

0.4607

0.4788

0.5971

Source: NSW Tobacco Traders ART cigarette price lists August 2002 to 201045,46,47,48,49,50,51,52,53

 

Table 13.3.2.2
Reported prices per stick (cents) paid by smokers, Australian arm of ITC cohort study

 


2002

2003

2004

2005

2006

2007

2008

2009

2010

Winfield 25s

0.3635

0.3622

0.3843

0.3952

0.4047

0.4268

0.4473

0.4593

0.5760

Longbeach 40s

0.3109

0.3198

0.3354

0.3548

0.3597

0.3768

0.4035

0.4147

0.5345

Peter Jackson 30s

0.3393

0.3402

0.3523

0.3735

0.3841

0.4029

0.4278

0.4446

0.5392

Horizon 50s

0.3041

0.3128

0.3285

0.3406

0.3585

0.3680

0.3754

0.3973

0.4850

Benson & Hedges 25s

0.3719

0.3715

0.3867

0.4050

0.4166

0.4439

0.4609

0.4904

0.5983

Holiday 50s

0.2909

0.3000

0.3178

0.3337

0.3495

0.3528

0.3807

0.3735

0.4704

Alpine 35s

0.3580

0.3620

0.3772

0.4025

0.4193

0.4108

0.4439

0.4726

0.5710

Dunhill 25s

0.3730

0.3832

0.4023

0.4200

0.4445

0.4512

0.4918

0.4739

0.6009

Marlboro 25s

0.3628

0.3889

0.3812

0.4006

0.4299

0.4288

0.4113

0.4775

0.6134

Escort 35s

0.3355

0.3462

0.3623

0.3700

0.3789

0.4066

0.4414

0.4125

0.5081

Weighted averages all brands

0.3546

0.3687

0.3829

0.3970

0.4103

0.4289

0.4520

0.4677

0.5877

 


2002

2003

2004

2005

2006

2007

2008

2009

2010

Average RRP, unweighted

0.3965

0.4131

0.4288

0.4471

0.4653

0.4839

0.5119

0.5320

0.6634

RRP weighted by use

0.3546

0.3687

0.3829

0.3970

0.4103

0.4289

0.4520

0.4677

0.5877

Weighted reported average

0.3391

0.3430

0.3589

0.3742

0.3844

0.4015

0.4235

0.4400

0.5370

% by which reported price different to RRP weighted

-4.4%

-7.0%

-6.3%

-5.7%

-6.3%

-6.4%

-6.3%

-5.9%

-8.6%

% by which reported price different to RRP unweighted

-5.0%

-7.8%

-7.0%

-7.0%

-8.2%

-7.8%

-8.1%

-8.1%

-10.1%

 

Table 13.3.2.3
Percentage by which reported average weighted price is different to recommended price (unweighted)

 


2002

2003

2004

2005

2006

2007

2008

2009

2010

Winfield

-1.8%

-6.2%

-3.9%

-5.9%

-7.6%

-6.4%

-6.8%

-8.5%

-8.6%

Longbeach

-7.2%

-8.0%

-7.5%

-5.4%

-7.5%

-6.7%

-6.2%

-6.3%

-3.9%

Peter Jackson

-4.0%

-7.2%

-7.3%

-5.4%

-5.9%

-5.2%

-4.9%

-4.4%

-8.1%

Horizon

-6.7%

-7.7%

-6.4%

-6.4%

-5.7%

-6.4%

-10.2%

-7.8%

-9.5%

Benson & Hedges

-2.1%

-6.7%

-6.1%

-6.3%

-7.4%

-5.1%

-6.3%

-4.6%

-7.7%

Holiday

-7.9%

-8.5%

-7.1%

-6.0%

-5.8%

-8.1%

-6.7%

-12.5%

-11.6%

Alpine

-5.8%

-8.1%

-7.1%

-4.6%

-4.3%

-9.9%

-7.9%

-5.9%

-9.4%

Dunhill

-2.9%

-5.1%

-4.2%

-4.5%

-2.9%

-5.2%

-2.0%

-10.2%

-7.3%

Marlboro

-4.5%

-2.3%

-7.9%

-7.3%

-4.5%

-8.4%

-16.4%

-7.1%

-5.3%

Escort

-2.6%

-3.1%

-2.5%

-4.8%

-6.6%

-4.5%

-2.5%

-10.9%

-8.6%

Source: International Tobacco Control Policy Evaluation Study, unpublished data provided by Timea Partos 2012

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