Non-tax price policies, recommendations and legal considerations described in the literature
| Policy | General description | Recommendations | Political arguments and legal considerations |
|---|---|---|---|
| Restrictions on price promotions | Bans or restrictions on tobacco product coupons, value-added promotions (eg, ‘buy one get one’ offers), or retailer rebates (eg, buy-down programmes) | ▸ Create comprehensive, rather than partial marketing bans and explicitly include price promotion restrictions. ▸ Sufficiently enforce implemented price promotion restrictions. Consider tying adherence to licensing, where appropriate. ▸ Ensure promotional bans apply only within the jurisdiction in which the law is passed | ▸ Anticipate industry resistance to any promotional restrictions ▸ In the USA, any impact on interstate commerce must be offset by benefit to state or locality ▸ In the USA, states and localities can only restrict the time, place and manner, but not the content, of promotion ▸ In the USA, banning coupon redemption rather than distribution may be less likely to inhibit interstate commerce |
| Minimum price laws | Laws that require a per cent mark-up on the wholesale/retail price of a tobacco product and/or a minimum floor price beneath which product cannot be sold | ▸ Consider a floor price structure ▸ Remove provisions that allow discounts, coupons, buy-downs ▸ Set rates above those established by free market ▸ Impose strong penalties and dedicate more resources for enforcement. ▸ Extend to non-cigarette tobacco products | ▸ Might be politically feasible in places where higher excise taxes are not. ▸ Draft laws to impact retailers in different jurisdictions equally and to avoid price fixing. ▸ Could benefit the tobacco industry and do not raise money for tobacco control efforts |
| Fee-based policies | Laws applying a fee to tobacco products to offset costs incurred by government related to tobacco-related issues, including improperly disposed cigarette butts/waste, and managing retailer licensing programmes | ▸ Base fee level on demonstrable costs ▸ Raised monies must be allocated to programme costs (eg, litter clean-up efforts, licensing programme administration) ▸ To impact prices, fees may need to be substantial | ▸ In some places, local laws may be pre-empted by laws from a higher level jurisdiction (eg, state or federal) ▸ In addition to impacting price, mitigation fees offset government costs for cleanup and result in less toxic environments. One study found that cigarette litter accounted for nearly ¼ of all waste-related costs |
| Price capping | Laws that place a cap on the pretax manufacturers’ price | ▸ Base cap level on costs faced by firms ▸ Pair with high excise taxes to transfer industry profits to government revenue and promote tobacco control ▸ Pair with marketing restrictions to inhibit targeted promotional discounts in new markets | ▸ Can be justified to counter excess market power by few large tobacco companies ▸ Not well implemented for tobacco products, but has been used in utilities |