Saturday, July 27, 2019

Tobacco Always Puts Profits First

In the UK, tobacco companies have wantonly increased their prices by more than is required by tax changes – and undermining the industry's own primary argument against increasing taxes on cigarettes. 

Lobbyists for cigarette firms have argued against rises in taxes, claiming that they will make their product too expensive, pushing smokers towards fake and illegally imported tobacco. 

This, the industry has claimed, actually reduces tax revenues and makes consumers less safe than if they smoke legal tobacco. 

But research published on Friday by researchers at the University of Bath and King's College London and funded by the National Institute for Health Research found tobacco companies regularly increased their prices beyond what has been mandated by the government. 

The authors said that this shows that the companies' claim that they are concerned about high prices prompting consumers to switch to the illicit market is most questionable. 

They suggest that, if this was the driving concern behind calls for lower cigarette taxes, companies would have tried to ensure their own share of tobacco prices was kept low. 

However, before 2010 in Britain and Ireland, almost 50 percent of the total price increase of tobacco problems came from companies themselves, not taxation, the study found. 

Between 2010 and 2012, when there were large and unexpected tax increases, industry-driven price changes were small, accounting for 16 percent and 20 percent respectively of the price increases in manufactured and roll-your-own (RYO) tobacco. 

But from 2013 to 2015, when tax increases were smaller and planned, a third of the price increase for manufactured cigarettes was industry-driven, rising to nearly half of the 48 percent of the price hike for RYO tobacco. 

RYO tobacco had the highest industry-driven price rises, despite higher levels of illicit trade for these products, the research, published in the British Medical Journal's Tobacco Control, found. 

However, the government had been reluctant to increase taxes further on RYO for fear of pushing smokers towards the illegal market, which is already larger than that for manufactured cigarettes, the study claims. 

Dr Robert Branston (right) from the University of Bath said: "…the results of our paper show that the industry has a track record of going beyond tax rises when it comes to price increases in order to enhance their profits". 

It’s simply pure greed. Before tobacco kills smokers, the companies that manufacture tobacco products want to milk as much from the smokers as they can before the smokers expire.

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