Background Tobacco pricing impacts use, yet military retailers sell discounted cigarettes. No systematic research has examined how military retail stores use internal community comparisons to set prices. We analysed data obtained through a Freedom of Information Act request on community price comparisons used by military retail to set cigarette prices.

Methods Data on cigarette prices were obtained directly from military retailers (exchanges) from January 2013 to March 2014. Complete pricing data were obtained from exchanges on 114 military installations.

Results The average price for a pack of Marlboro cigarettes in military exchanges was US$5.51, which was similar to the average lowest community price (US$5.45; mean difference=−0.06; p=0.104) and almost a US$1.00 lower than the average highest price (US$6.44). Military retail prices were 2.1%, 6.2% and 13.7% higher than the lowest, average and highest community comparisons, respectively, and 18.2% of exchange prices violated pricing instructions. There was a negative correlation (r=−0.21, p=0.02) between the number of community stores surveyed and exchange cigarette prices.

Conclusions There was no significant difference between prices for cigarettes on military installations and the lowest average community comparison, and in some locations, the prices violated Department of Defense (DoD) policy. US Marine Corps exchanges had the lowest prices, which is of concern given that the Marines also have the highest rates of tobacco use in the DoD. Given the relationship between tobacco product prices and demand, a common minimum (or floor) shelf price for tobacco products should be set for all exchanges and discount coupon redemptions should be prohibited.