This section explores how affordable* tobacco is to young people, industry tactics to maintain affordability and the range of measures in place to reduce that affordability. Drawing on national and international research, it examines legislative, policy, and industry factors that shape tobacco affordability for minors. Each subsection below provides in-depth analysis and evidence on key issues such as tax increases, standardised pack and pouch size, and RYO harmonisation as well as other future policy options.
5.12.1 How do young people source tobacco in Australia?
5.12.2 How affordable is tobacco to young people in Australia?
5.12.3 The role of disposable income
5.12.4 Industry tactics to maintain affordability
5.12.4.1 Smaller packs and cheaper tobacco options
5.12.4.2 Industry opposition to taxation policy
5.12.5 Policy to reduce affordability
5.12.5.1 Tax increases
5.12.5.1.1 The effectiveness of tax increases on uptake
5.12.5.2 Standardised tobacco pack and pouch sizes
5.12.5.3 RYO harmonisation
5.12.5.4 Further policies
In a systematic review that included 20 studies focused solely on adolescents and young people, all reported price sensitivity, concluding that higher tobacco prices reduce smoking among young people.1
*Affordability refers not just to the cost of tobacco products, but how much money people have available to purchase them, and the relative cost of tobacco compared to other items.
5.12.1 How do young people source tobacco in Australia?
As noted in Section 5.11.1, many young people who smoke do not purchase their own cigarettes directly, rather they obtain them through their social network and from other informal sources. Data from the Australian Secondary Students’ Alcohol and Drug (ASSAD) Survey in 2022–232 showed that the most common way for adolescents to access cigarettes was through friends (50.3%), with almost one-third of those friends being under the age of 18. Although it is illegal to sell tobacco products to children under the age of 18 years in all Australian states and territories, the second most common way that adolescents reported accessing cigarettes was purchasing it themselves, with 12.0% of students who smoked reporting in 2022-23 that they bought their last cigarette, and 9.5% got someone to buy the tobacco for them.2 Data from earlier ASSAD surveys between 1987 and 2017 show that the proportion of Australian adolescents who smoke and buy cigarettes themselves has declined significantly over time.3
5.12.2 How affordable is tobacco to young people in Australia?
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.ncbi.nlm.nih.gov/pubmed/12054336
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.
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.
White V and Smith G. 3. Tobacco use among Australian secondary students, in 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
White V and Bariola E. 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. Canberra: Drug Strategy Branch Australian Government Department of Health and Ageing; 2012. Available from: http/www.nationaldrugstrategy.gov.au/internet/drugstrategy/Publishing.nsf/content/school11
White V and Williams T. Australian secondary school students’ use of tobacco, alcohol, and over-the-counter and illicit substances in 2014. Melbourne, Australia: Centre for Behavioural Research in Cancer, Cancer Council Victoria, 2016.
Guerin N and White V. ASSAD 2017 Statistics & Trends: Trends in substance use among Australian secondary school students 1996–2017, updated 3 Jul 2020. Cancer Council Victoria, 2019. Available from: https://www.health.gov.au/resources/publications/trends-in-substance-use-among-australian-secondary-school-students-1996-2017.
Scully M, Bain E, Koh I, Wakefield M, and Durkin S. ASSAD 2022/2023: Australian secondary school students’ use of tobacco and e-cigarettes., Canberra: Australian Government Department of Health and Aged Care, 2023. Available from: https://www.health.gov.au/resources/publications/australian-secondary-school-students-use-of-tobacco-and-e-cigarettes-2022-2023?language=en.
NSW Retail Traders’ Association. Price lists—Cigarettes. The Retail Tobacconist of NSW. 1996–2011: 56 to 87 (February editions); 2014 and 2017: 90 to 101 (March editions).
CTC Eastern. National Price Lists (2022/2023). CTC Eastern. Available from: http://www.ctceastern.com/home/home_index.html. Accessed: 21/04/2023.
As shown above in Figure 5.12.1, the affordability of cigarettes to Australian young people has substantially decreased over time and is influenced by the price of tobacco and the amount of disposable income one has access to. While the amount of money available to students approximately tripled from 1996 to 2022/2023, the cost of the most popular cigarettes among teens increased 7-fold over the same period. Young people aged 12 to 17 in Australia were therefore only able to afford approximately one-third as many cigarettes with their available disposable income (pocket money) in 2022/2023 as they could in 1999.
Section 13.5.3 describes in detail the affordability of tobacco products to young people in Australia in relation to their average available pocket money per week from years 1996 to 2022/23.
5.12.3 The role of disposable income
Research exploring smoking among adolescents has shown that those with greater disposable income, or access to more pocket money, are more likely to try smoking, smoke more frequently, and smoke with greater intensity.4,5 In contrast, adults are more likely to smoke at lower levels of income (see Section 9.1).4 A Canadian study in 20195 found that a 10% increase in pocket money corresponded to a modest but statistically significant rise in smoking initiation (0.7%) and smoking intensity (0.6%). These effects were consistent across younger and older students, but were relatively small compared to the much stronger influence of cigarette prices. The study showed that a 10% increase in price corresponded to a 11.3% reduction in initiation and a 10.2% reduction in intensity. Similarly, a 2017 study4 analysing data from six European cities, found a clear and consistent association between higher personal income and increased likelihood of smoking experimentation, weekly smoking, daily smoking, and greater cigarette consumption among adolescents. These associations persisted even after accounting for family socio-economic status, suggesting that personal income has an independent influence on adolescent smoking. However, among adolescents from low socio-economic backgrounds, the link between income and smoking intensity was weaker, possibly due to alternative sources of cigarettes.
Research has calculated that reducing young people’s pocket money, however, would not be as effective at reducing uptake of smoking as increasing the price of tobacco through taxation.5 Taxation to address uptake is discussed in detail below in Section 5.12.5.1.
5.12.4 Industry tactics to maintain affordability
The tobacco industry’s internal documents show clearly that these companies are aware, based on early econometric studies as well as internal research, that smoking among young people is more responsive to price than is smoking among adults, and this knowledge informed the industry’s use of price reducing tactics.6 The 2012 US Surgeon General’s* report concluded that the industry’s extensive use of price-reducing promotions has led to higher rates of tobacco use among young people than would have occurred in the absence of these promotions.6
*Ch.5, Section: The Tobacco Industry’s Pricing Practices and Use of Tobacco Among Young People
5.12.4.1 Smaller packs and cheaper tobacco options
The tobacco industry has been shown to target new users and younger users through small pack size offerings, in both factory-made packs and roll-your-own (RYO) pouch sizes. These smaller packs cater to lower consumption rates among young or novice users, align with a preference for lower upfront pack costs, and are easier to conceal.7,8
A 2019 study7 revealed that the tobacco industry strategically adapted its marketing of RYO tobacco products in Australia during the 2010s to maintain appeal and drive uptake, particularly among new and younger users. Users of RYO tobacco are able to roll low-weight cigarettes, meaning that each cigarette costs less per stick than factory-made cigarettes (see Section 13.4.5). Research shows RYO tobacco is perceived by many as an affordable option when compared to factory-made cigarettes.9 The industry also introduced progressively smaller pouch sizes—some as small as 12.5g, vs. the typical 30g or 50g—and was able to mitigate the impact of tax increases in Australia during this time by ensuring at least one product remained available at a low upfront cost, thereby sustaining affordability for price-sensitive consumers. These smaller packs were able to serve as low-commitment entry points into smoking, particularly for young people.7
Results from the 2022–23 Australian Secondary Students’ Use of Tobacco, Alcohol, Over-the-counter Drugs, and Illicit Substances (ASSAD) reported that just over half (52%) of students who had ever smoked reported having used roll-your own tobacco at least once.2 Previous ASSAD surveys also show increases in students reporting use of RYO cigarettes over time.3
As well as keeping prices low through smaller pack sizes, the tobacco industry has also been found to increase the availability of budget tobacco options and displaying these cheaper options prominently on in-store tobacco price boards, following tax increases in Australia.10
For detailed information on the role of pack sizes in promoting uptake see Section 5.13.3.
5.12.4.2 Industry opposition to taxation policy
Tobacco industry internal corporate documents provide clear evidence that the tobacco industry has long known the effects of price increases on smoking initiation, consumptions levels and quitting behaviors. Here two excerpts illustrate this point.11
Philip Morris—1987:
“…the 1982-‐83 round of price increases caused two million adults to quit smoking and prevented 600,000 teenagers from starting to smoke. Those teenagers are now 18-‐21 years old, and since about 70 percent of 18-‐21 year-‐olds and 35 percent of older smokers smoke a PM brand, this means that 700,000 of those adult quitters had been PM smokers and 420,000 of the non-‐starters would have been PM smokers... We don't need to have that happen again.”12
RJ Reynolds—1994:
“Taxation and advertising are viewed as the principal problems to be addressed. But as we have seen, there is a direct correlation between youth smoking and tax increases, advertising bans and smoking restrictions.”13
The tobacco industry, in its recognition of the effectiveness of tax increases, and young people’s price sensitivity, employs a number of tactics to oppose large increases in taxes. See Chapter 13, Section 13.10 for an indepth breakdown of the tobacco industry arguments.
5.12.5 Policy to reduce affordability
5.12.5.1 Tax increases
“Children are less likely to initiate smoking if tobacco prices are high. Tobacco taxation is a powerful and cost-effective way to minimize smoking uptake among children.”—World Health Organization, 201714
Raising the price of tobacco products, particularly through manipulation of taxes or other imposts, is a key plank of a comprehensive tobacco control policy, and is known to reduce smoking initiation, participation and consumption among young people.6,15-19 An effective taxation policy ensures that increases in the price of tobacco are real and do not erode over time (that is, not offset by increases in earning capacity, or pocket money in the case of children) in order to maintain effect.20
5.12.5.1.1 The effectiveness of tax increases on uptake
Reviews,1,21 as well as reports from USSG6,22 and WHO,20,23,24 have consistently concluded over decades that increased tobacco excise taxes and prices are effective in reducing overall tobacco consumption and prevalence of tobacco use and improvement of public health, including by preventing initiation among young people, promoting cessation among current users and lowering consumption among those who continue to use.
The 2012 Surgeon General report on Preventing Tobacco Use Among Youth and Young Adults concluded that increases in cigarette prices reduce the initiation, prevalence, and intensity of smoking among young people.6 In the 2024 Surgeon General report on Eliminating Tobacco-Related Disease and Death: Addressing Disparities the report states within its conclusions that young people are especially price-sensitive, and price increases, by means of taxation, help reduce tobacco use at the age when they are most likely to begin smoking.22
In WHO FCTC Guidelines for implementation of Article 624 it states that, regarding the effect of higher taxes and prices on tobacco use by young people, it is estimated that young people are two to three times more responsive to tax and price changes than older people. Therefore, tobacco tax increases are likely to have a significant effect on reducing tobacco consumption, prevalence and initiation among young people, as well as on reducing the chances of young people moving from experimentation to addiction.24
Over 20 experts on economics, epidemiology, public policy and tobacco control were asked by the International Agency for Research on Cancer (IARC) to evaluate the strength of the available evidence on the effects of tax and price policies to prevent and reduce tobacco use. In relation to uptake among young people, they concluded that increases in tobacco excise taxes (that increase prices) reduce the initiation and uptake of tobacco use among young people, with a greater impact on the transition to regular use.21
Australian research25 based on surveys of more than 20,000 secondary students from 1990–2005, found that higher cigarette prices were associated with significant declines in adolescent smoking. After accounting for other policies, each one-cent increase in the real price per stick was linked to a 2% reduction in past-month smoking, with smokefree laws and greater tobacco control spending also contributing to reduced prevalence.25
Research focusing specifically on the effects of price on the stage of initiation of smoking (compared to reduced consumption or cessation) has shown that in response to higher prices, initiation of smoking among young people fell in China,26 and in Chile.27
The effects of tax increases on consumption, prevalence, and cessation are discussed in detail in Chapter 13 (Sections 13.8.1, 13.8.2, and 13.8.5).
5.12.5.2 Standardised tobacco pack and pouch sizes
Standardisation of pack and pouch size is a tobacco price policy designed to reduce the affordability advantage of small pack size offerings from being released onto the market. As mentioned above, the tobacco industry has been shown to target new users and younger users through small pack size offerings, in both factory-made packs and RYO pouch sizes. These smaller packs cater to lower consumption rates among young or novice users, and are more affordable.7,8 From 1 July 2025, new Australian Federal laws require cigarettes to be sold in packs of 20 only.28 Similarly, loose tobacco must be sold only in 30 gram packs.28
5.12.5.3 RYO harmonisation
Roll-your-own (RYO) harmonisation is a tobacco tax policy designed to reduce the affordability advantage of roll-your-own tobacco compared to factory-made cigarettes (FMCs). Prior to 2017, the excise on RYO tobacco in Australia was calculated based on the assumption that each RYO cigarette contained 0.8 grams of tobacco. However, in practice, Australians who smoke typically used around 0.5 grams per cigarette, meaning RYO tobacco was effectively taxed at a lower rate per stick than FMCs.29
To address this disparity, the Australian Government introduced RYO harmonisation in 2017, progressively reducing the assumed tobacco weight used to calculate RYO excise from 0.8 grams to 0.7 grams over four years. This change, combined with existing annual 12.5% excise increases, caused the tax on RYO tobacco to rise more steeply than that on FMCs between 2017 and 2020. A second phase of RYO harmonisation began in 2023, continuing to narrow the excise gap. By March 2025, a cigarette rolled with 0.6 grams of tobacco attracted about 6% less excise than a manufactured cigarette, down from 25% in 2017.
See Section 13.6.3.7 Harmonisation of roll-your-own tobacco excise for more information.
5.12.5.4 Further policies
Further policies to reduce affordability of tobacco in Australia are discussed in Section 13.13.3 and these include minimum pricing, wholesale price cap regulation, retail licensing to regulate the price of tobacco products, bans on price discounting at the point of sale, among others.
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References
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