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Tobacco industry tactics in response to cigarette excise tax increases in Mauritius
  1. Julie Berthet Valdois1,
  2. Corne Van Walbeek1,
  3. Hana Ross1,
  4. Hema Soondram2,
  5. Bhavish Jugurnath2,
  6. Marie Chan Sun3,
  7. Deowan Mohee4,5
  1. 1School of Economics, University of Cape Town, Rondebosch, South Africa
  2. 2Faculty of Law and Management, Department of Finance and Accounting, University of Mauritius, Reduit, Moka, Mauritius
  3. 3Faculty of Science, University of Mauritius, Reduit, Moka, Mauritius
  4. 4NGO VISA, Curepipe, Mauritius
  5. 5African Tobacco Control Alliance, Lome, Togo
  1. Correspondence to Julie Berthet Valdois, School of Economics, University of Cape Town, Rondebosch 7701, South Africa; jberthet.valdois{at}gmail.com

Abstract

Background In response to high smoking rates, especially among men, Mauritius launched a National Action Plan on Tobacco Control in 2008. It changed its tax system from a mixed system to a uniform specific system. Despite these interventions, cigarette consumption and smoking prevalence in Mauritius decreased only marginally in the subsequent decade.

Method Using publicly available data, we decompose the retail price of cigarettes into tax and net-of-tax components, between 2011 and 2017. We cover premium, popular and economy cigarettes.

Results Since its introduction in 2008, the nominal excise tax was increased six times. Between 2011 and 2017, the real value of the excise tax increased by 47%. Meanwhile, British American Tobacco (BAT) increased the real net-of-tax price of premium cigarettes by 61.8% and of popular cigarettes by 47.2%, thus overshifting the tax increase. On economy cigarettes, BAT decreased the real net-of-tax price by 14.7%, thus undershifting the excise tax increase.

Conclusion Through its pricing strategy, BAT has greatly undermined Mauritius’s tobacco control policy. However, BAT cannot continue undershifting the excise tax on economy brands, since the net-of-tax proportion of the retail price is very low already. BAT would have little choice but to increase the retail price on economy brands in response to future excise tax increases. The government of Mauritius is encouraged to keep the specific excise tax structure but to increase the rate at which it is levied.

  • low/middle income country
  • price
  • taxation
  • tobacco industry

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Footnotes

  • Contributors DM, CVW and MCS initiated the research. HS and BJ supervised the data collection in Mauritius. JBV compiled the database. MCS coordinated the data validation workshop with relevant stakeholders in Mauritius. JBV and CVW analysed the data. The results were synthesised and written by JBV, CVW and HR with inputs from the rest of the team.

  • Funding This study was funded by Cancer Research UK CRUK- C62640/A24723.

  • Competing interests None declared.

  • Patient consent for publication Not required.

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

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