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Abstract
Background Between 2010 and 2020, the New Zealand (NZ) Government increased tobacco excise tax by inflation plus 10% each year. We reviewed market structure changes and examined whether NZ tobacco companies shifted excise tax increases to maintain the affordability of lower priced cigarette brands.
Methods We cluster-analysed market data that tobacco companies supply to the NZ Ministry of Health, created four price partitions and examined the size and share of these over time. For each partition, we analysed cigarette brand numbers and market share, calculated the volume-weighted real stick price for each year and compared this price across different price partitions. We calculated the net real retail price (price before tax) for each price partition and compared these prices before and after plain packaging took effect.
Results The number and market share of Super Value and Budget brands increased, while those of Everyday and Premium brands decreased. Differences between the price of Premium and Super Value brands increased, as did the net retail price difference for these partitions. Following plain packaging’s implementation, Super Value brand numbers more than doubled; contrary to industry predictions, the price difference between these and higher priced brands did not narrow.
Conclusions Between 2010 and 2020, NZ tobacco companies introduced more Super Value cigarette brands and shifted excise tax increases to reduce the impact these had on low-priced brands. Setting a minimum retail price for cigarettes could curtail tobacco companies’ ability to undermine tobacco taxation policies designed to reduce smoking.
- price
- public policy
- taxation
- packaging and labelling
Data availability statement
Data are available in a public, open access repository. Data are available from the NZ Ministry of Health Tobacco Returns website.
This is an open access article distributed in accordance with the Creative Commons Attribution Non Commercial (CC BY-NC 4.0) license, which permits others to distribute, remix, adapt, build upon this work non-commercially, and license their derivative works on different terms, provided the original work is properly cited, appropriate credit is given, any changes made indicated, and the use is non-commercial. See: http://creativecommons.org/licenses/by-nc/4.0/.
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Data availability statement
Data are available in a public, open access repository. Data are available from the NZ Ministry of Health Tobacco Returns website.
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Supplementary Data
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Footnotes
Twitter @JRBranston
Contributors PG and JH conceptualised the study. PG and KG undertook the data analyses. PG and JH wrote the manuscript. JRB advised on analyses and, with RE and NW, commented on advanced drafts. PG and JH led the revisions with input from all authors. All authors have approved the final manuscript. PG is the guarantor.
Funding PG, JH, RE and NW are funded by the University of Otago, NZ. KG is an independent researcher. JRB is supported by Bloomberg Philanthropies Stopping Tobacco Organizations and Products project funding (www.bloomberg.org).
Competing interests JRB owns 10 shares in Imperial Brands for research purposes. The shares were a gift from a public health campaigner and are not held for financial gain or benefit. All dividends received are donated to health-related charities, and proceeds from any future share sale or takeover will be similarly donated.
Provenance and peer review Not commissioned; externally peer reviewed.
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