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Tobacco companies behind price hikes

Tobacco companies have been behind half of the recent cigarette price hikes in Britain, industry experts have claimed.

Writing in Tobacco Control, experts from the University of Bath and the UK Centre for Tobacco Control Studies point out that although the industry claims tax increases are to blame, in half of all cases (48%) companies were raising their own prices.

Tobacco companies have “repeatedly claimed” that tax rises are fuelling tobacco smuggling.

The editorial piece, published online states: “These claims are made despite evidence of the far more complex supply-side drivers of the illicit tobacco trade (including tobacco industry involvement), recent survey evidence showing that price was unrelated to levels of illicit tobacco use across Europe, and data from her Majesty's Revenue and Customs showing that levels of illicit cigarettes in the UK have declined steadily to reach an estimated 9% by 2010-11.”

For all but the cheapest brands, the proportion of the total increase directly attributable to the tobacco industry was more than half, at around 55%, with tax increases taking up 45%, the analysis showed.

The authors admit that without a detailed breakdown of manufacturing, distribution, and marketing costs, they are unable to pinpoint whether rising overheads have driven these increases.

But industry claims that tax hikes are responsible for “massive price increases” are misleading, they conclude, because they fail to take account of the large proportion of price hikes generated by tobacco companies themselves.