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Difference between recommended retail price and sales price for tobacco products in independent and convenience (small) retailers before and after the introduction of standardised tobacco packaging in the UK
  1. Nathan Critchlow1,
  2. Martine Stead1,
  3. Crawford Moodie1,2,
  4. Kathryn Angus1,
  5. Douglas Eadie1,
  6. Anne-Marie MacKintosh1,2
  1. 1 Institute for Social Marketing, UK Centre for Tobacco and Alcohol Studies, Faculty of Health Sciences and Sport, University of Stirling, Stirling, UK
  2. 2 Centre for Tobacco Control Research, Institute for Social Marketing, Faculty of Health Sciences and Sport, University of Stirling, Stirling, UK
  1. Correspondence to Dr Nathan Critchlow, Institute for Social Marketing, Faculty of Health Sciences and Sport, University of Stirling, Stirling, FK9 4LA, UK; nathan.critchlow{at}stir.ac.uk

Abstract

Aim Recommended retail price (RRP) is a marketing strategy used by tobacco companies to maintain competitiveness, communicate product positioning and drive sales. We explored small retailer adherence to RRP before and after the introduction of the Standardised Packaging of Tobacco Products Regulations in the UK (fully implemented on 20 May 2017) which mandated standardised packaging of cigarettes and rolling tobacco, set minimum pack/pouch sizes and prohibited price-marking.

Method Monthly electronic point of sale data from 500 small retailers in England, Scotland and Wales were analysed. From May 2016 to October 2017, we monitored 20 of the best-selling fully branded tobacco products (15 factory-made cigarettes, 5 rolling tobacco) and their standardised equivalents. Adherence to RRP was measured as the average difference (%) between monthly RRPs and sales prices by pack type (fully branded vs standardised), price-marking on packaging and price segment.

Results The average difference between RRP and sales price increased from +0.36% above RRP (SD=0.72) in May 2016, when only fully branded packs were sold, to +1.37% in October 2017 (SD=0.30), when standardised packs were mandatory. Increases above RRP for fully branded packs increased as they were phased out, with deviation greater for non-price-marked packs and premium products.

Discussion Despite tobacco companies emphasising the importance of RRP, small retailers implemented small increases above RRP as standardised packaging was introduced. Consequently, any intended price changes by tobacco companies in response to the legislation (ie, to increase affordability or brand positioning) may be confounded by retailer behaviour, and such deviation may increase consumer price sensitivity.

  • advertising and promotion
  • packaging and labelling
  • price
  • public policy
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Footnotes

  • Contributors NC conceived the manuscript and was responsible for data management, statistical design and analysis, with support from A-MM. All authors contributed to interpretation of the results and KA identified contextual information from the retail trade press. NC drafted the article, with support from MS, CM and KA. All authors provided feedback and approved the final version. MS, A-MM and DE directed study design and data acquisition.

  • Funding This work was funded by Cancer Research UK (C24178/A22568).

  • Competing interests None declared.

  • Patient consent Not required.

  • Provenance and peer review Not commissioned; externally peer reviewed.

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