Table 1

Non-tax price policies, recommendations and legal considerations described in the literature

PolicyGeneral descriptionRecommendationsPolitical arguments and legal considerations
Restrictions on price promotionsBans 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 lawsLaws 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 policiesLaws 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 cappingLaws 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