New TCRG Research Finds that Reducing Tobacco Supplier Profits and Pricing Power Could Raise up to £4.9bn

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A new paper from the Tobacco Control Research Group (TCRG), in collaboration with the Sheffield Addictions Research Group (SARG) at the University of Sheffield, has modelled the impact of a polluter pays levy scheme on tobacco in England.

The scheme would consist of a wholesale price cap on tobacco products and a concomitant increase in tobacco taxes to prevent retail prices from falling. The study found that the proposed policy, which aims to stop the tobacco industry from using pricing as a marketing tool, could raise between GB£1 billion and GB£4.9 billion over five years, depending on the level of price cap and how quickly it is introduced. It could also prevent up to 10,000 hospital admissions and save almost 44,000 years of life over a 20-year period.

Tracking 250,000 individuals aged 18 to 89, the analysis explored six scenarios, varying the stringency and speed of tobacco price cap implementation. This builds on earlier research by SARG which informed minimum unit pricing for alcohol in Scotland.

A wholesale price cap and associated tax rises were investigated across the six scenarios, with outcomes compared against a business-as-usual scenario. Outcomes varied with the price cap level and speed of implementation, with lower caps and higher tax rises yielding larger changes in consumer behaviour, particularly for the most disadvantaged 20% of the population.

An immediate hard cap in England could generate GB£4.9 billion by 2029 and, by 2044, lead to 1,636 fewer deaths, 43,987 fewer years of life lost, and 10,073 fewer hospital admissions.

This research is the first to model the impact of a scheme to reduce tobacco supplier profits and pricing power, which is one of the 16 forward looking measures identified by the expert group of the WHO Framework Convention on Tobacco Control.

Dr Rob Branston, co-director of the TCRG and co-author of the study, said:

“By passing the Tobacco and Vapes Act, the UK Government has protected a generation from the harmful effects of smoking. Our research shows there is an opportunity for further leadership by tackling the vast profits of an industry that kills more than half of its long-term users. This proposed policy would bring about multiple wins: it raises a large amount of money for the government, delivers health benefits, and helps the poorest the most.”

Read the paper:

See also the Tobacco Tactics pages:

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