Pricing of tobacco products during, and after, the introduction of standardized packaging: An observational study of retail price data from independent and convenience (small) retailers in the United Kingdom

Citation

Critchlow N, Stead M, Moodie C, Angus K, Eadie D & MacKintosh AM (2019) Pricing of tobacco products during, and after, the introduction of standardized packaging: An observational study of retail price data from independent and convenience (small) retailers in the United Kingdom [Tobacco pricing and standardised packaging]. Addiction, 114 (3), pp. 523-533. https://doi.org/10.1111/add.14488

Abstract
Background and aims: Tobacco companies claimed that standardized packaging, phased in/introduced May 2016–May 2017, would reduce prices and increase consumption. We: (1) describe changes in price-per-cigarette and price-per-gram during, and after, the introduction of standardized packaging; (2) describe price changes by cigarette price segment; and (3) analyse price changes by stage of implementation. Design: An observational study, using electronic point-of-sale data, monitored price trends in three periods: (1) May–September 2016, start of transition period; (2) October 2016–May 2017, when fully branded and standardized products were sold and duty escalators implemented; and (3) June–October 2017, when standardized packaging was mandatory. Setting: United Kingdom. Participants: Small retailers (n = 500) stratified by region and deprivation. Data were monitored for 20 leading fully branded tobacco products [15 factory made cigarettes (FMC), 5 roll-your-own (RYO)] and their standardized equivalents. Measurement: Price-per-cigarette and price-per-gram, based on monthly average Recommended Retail Price (RRP) and actual sale price, adjusted for inflation using the Consumer Pricing Index (CPIH). Net changes (£GBP, %) were analysed by product type (FMC versus RYO) and FMC price segment (value, mid-price, premium). Findings: Between May 2016 and October 2017, the average inflation-adjusted RRP/price-per-cigarette and price-per-gram increased for FMC (all price segments) and RYO. For example, sales price-per-cigarette increased +4.64%, with the largest increases for value (+6.81%), premium (+5.32%) and mid-price FMCs (+3.30%). Net sales price-per-cigarette and price-per-gram increases were largest in period 2, when fully branded and standardized products were sold and duty escalators were implemented (FMC = +4.70%; RYO = +3.75%). There were small decreases in sales price-per-cigarette and price-per-gram once standardized packaging became mandatory (FMC = –1.14%; RYO = –0.88%). Conclusion: In the United Kingdom, the price of leading roll-your-own and factory-made cigarette brands sold by small retailers increased as standardized packaging was phased in, with increases larger than expected through duty escalation.

Keywords
plain packaging; price; standardised packaging; tobacco; tobacco marketing; tobacco price strategy;

Journal
Addiction: Volume 114, Issue 3

• Critchlow Et Al-2018-Addiction