A sinking lid tobacco production and import strategy

The purpose of the strategy proposed is to end the commercial supply of tobacco within a fixed period, in a manner that provides the best possible health and social outcomes for the population of a jurisdiction. The strategy leads to a prohibition of commercial tobacco supply, but not of growing tobacco for personal use. We stress that the prohibition of tobacco sales, but not other clean nicotine products, is different from the historical examples of the prohibition of alcohol. That is, the addictive component in tobacco will be provided via alternative means, for those who cannot quit nicotine. Some of the wider arguments about tobacco prohibition have been addressed elsewhere.1 20 21

Legislation would introduce regular reductions in the allowable amount of tobacco released to customers, sufficient to achieve (near) zero commercial sales within a fixed period. We suggest a period of 10 years, with a reduction of 5% of the initial level every 6 months (ie, to 95%, 90%, etc). This would provide governments with appropriate urgency, and smokers with a clear foreseeable end date as a potent stimulus to quit. Longer time periods are less likely to meet these criteria. Alternatively, the reduction could be until the smoking prevalence was below a fixed level (eg, under 1% for all social and ethnic groups) at which point either a move of all remaining smokers to other nicotine supplies could occur, or a licensed smoker system be instigated.

Tobacco manufacturers would apply periodically bid at government-run auctions for a residual quota, and could trade such quota. With careful implementation, such auctions have been effective for sulphur dioxide allowances,22 and electromagnetic wavelength spectrum auctions.23 A government agency could also take part in the quota auction, in order to limit the effects of any auction rigging by manufacturers, or in case the large commercial tobacco suppliers suddenly left the country. Quota owners could supply retailers through current distribution systems. The strategy differs from general cap and trade systems, as it seeks not merely to limit or reduce the supply or production of a product, but to phase out commercial sales.

If the auction system and commercial market operated effectively, then as the supply decreased, the price would increase so that demand equalled supply. The level of the price, as supply reduced, would be influenced by demand. Demand would reflect the impact of other interventions to reduce demand (see below and figure 1), and the changing normality of smoking. However, very much higher tobacco prices, closer to the real social cost,24 would be an integral part of the strategy, and governments would need to be explicit in communicating this. The policy intention of higher prices should be communicated transparently, so that the price changes are clearly signposted to smokers, and it is made clear that the prices are part of a deliberate strategy to help and stimulate smokers to quit.

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Figure 1

Model for a ‘sinking lid’ on tobacco sales as an endgame policy. The downward sloping straight line shows a simple 10% per annum decline in supply. The thinnest curved line shows what might happen to price (right y-axis) if nothing else happens other than setting a sinking lid on tobacco sales quotas. The thicker curved lines show what might happen to price if a range of adjunct measures were also put in place to reduce demand for retail tobacco—for example, intensive mass media campaigns, through to the provision of alternative nicotine delivery devices.

If a non-commercial system was needed to replace the commercial market for tobacco (eg, because of tobacco company exits or market rigging), a government-sponsored agency could take over all distribution of tobacco products (thus removing tobacco companies from at least wholesale marketing).3 4 In one model, an agency would be the sole buyer of tobacco products from manufacturers, and would sell unbranded products to retailers or wholesalers.3 Bids (by price and volume) would be made to this agency for the available supply (ie, the price would be determined by a regulated market for the fixed supply). This, and more completely non-commercial models,4 would help remove commercial incentives to maintain or increase demand for tobacco products. However, the establishment costs, processes and time involved of this approach would need to be weighed against the benefits.

Necessary components

Necessary components of the sinking lid approach could include the following. First, simplicity and clarity of intention, timescales and mechanisms, so as to facilitate communication to and understanding among the public, media and key stakeholders. Second, the use of tobacco remaining legal (within smokefree area constraints) with individuals able to legally grow a limited amount of tobacco for personal use (but not for sale or trade).

We consider that in most developed countries (where such a sinking lid strategy might be initially introduced) growing for home use would only be conducted by a small minority, owing to the requirements and difficulties involved (eg, climate, time, materials and space). In particular, plants can be lost to fungal infections if local humidity levels are too high, and if good air flow is not maintained during air-dried curing. Artificial drying and toasting requires careful and constant supervision. Home-growing may decline once new users experience the rough taste of home-grown tobacco, which lacks the blending, the sweeteners and the flavouring of manufactured products. Similarly, the variation in nicotine levels in the final product may count against it developing sustained popularity (relative to the far more consistent nature of manufactured tobacco).

If illegal sales from this source became a significant problem, then we suggest a public health approach to the problem, which focuses on demand reduction (with education and smoking cessation support, etc). If necessary, this approach would be further enabled by a zero-fee ‘tobacco home-growing licence’, for a specific place, for say 20 tobacco plants. That number would allow for around 1 kg of tobacco per year, or around five cigarettes of 0.5 g each per day for a smoker. Where there was any question of tobacco being possessed for sale, a licence could provide proof of legality. Such licensing could also allow these smokers to be provided with additional quitting information, and access to quitting support. Regardless of the popularity of home growing, some public education will be desirable on the health and fire-safety hazards of the home-grown product.

Third, the revenue from quota bidding (in addition to tax revenues) being allocated to massive increases in smoking cessation media campaigns and services, and to fund ongoing and complementary tobacco control activities as described below. Industry profits could be limited by both the cost of quota bids, and increased tobacco taxation. Setting tobacco tax as a percentage of retail price could further reduce chances of excess profiteering by tobacco companies.

Fourth, periodic reviews at regular stages, to ensure policies are adjusted to deal with unexpected consequences, are critical. After reviews, the phase-out period could be shortened or lengthened, and the timing and intensity of complementary tobacco control initiatives reviewed. In particular, a review of policy options when at near-to-zero smoking prevalence could decide on the assistance needed by the few continuing existing smokers. Factors to consider in the reviews, in deciding the speed of quota reduction include: (i) the availability and take-up of alternative nicotine supplies; (ii) the current smoking prevalence and rate of decline (including among key target population groups); and (iii) the success of communication to smokers and the public, as measured by knowledge and support in these groups. The point of the strategy is to get as close as possible to nil smoking prevalence. Once close to nil, there are a number of options for what to offer the remaining smokers—for example, a supply by prescription of tobacco for registered smokers (perhaps with a reducing dose) along with cash incentives to quit and stay quit).

Possible adverse effects

High priced tobacco could result in the following adverse consequences (depending on the jurisdiction): smuggling at significant levels, sufficient to erode the price signal (eg, if border controls are inadequate); increased theft from wholesalers, retailers and smokers (and some consequent illegal sales); and illegal cultivation for commercial sales.

For those smokers who do not quit or reduce tobacco use, or use nicotine replacement therapy as an alternative, these people and their families may have reduced personal and household disposable income.25 26 This may potentially aggravate social inequalities in the short to medium term, particularly if parallel policies (see below) are not strengthened. However, research to date indicates that at a population level, higher tobacco prices may have a net beneficial effect in terms of life saved.27 Smoking elimination is ultimately pro-equity. In this strategy, hardship to those who continue to smoke and their families will be limited in time, there will be substantial economic and health benefits to the greatly increased numbers who quit; and there would be increased cessation support. Easily accessible best practice smoking cessation support (see below) is ethically essential, as much higher prices for highly addictive tobacco products will result in (temporary) additional financial hardship for some continuing smokers and their families.25 26

The sinking lid could result in increased efforts by manufacturers and retailers to maintain or increase demand, so as to maintain their profits. If these efforts were insufficiently controlled by the complementary interventions below, this also could require the introduction of a non-commercial tobacco supply system.

Tenacious and sophisticated tobacco industry attempts to prevent or tarnish an exemplar model can also be expected, in line with their activity against other tobacco control initiatives.28–32 The attempts could include the assembly of opposing coalitions, the infiltration of health organisations and political processes, and the division of tobacco control organisations by exploiting differences of opinion.33 34 In particular, the industry could attempt to position endgame strategies as excessive state interference with personal autonomy and the working of the ‘free market’, and as ‘irresponsible’ and ‘utopian’, while portraying some conventional tobacco control efforts as ‘moderate’.

Industry tactics to try and make the system fail (eg, by manipulating prices and creating artificial shortages), could be negated by various levels of government intervention from the point of the quota auctions onwards. For instance, if a government agency (which would have agreements in place with a tobacco company to supply tobacco products) took part in the quota auction, it could provide a backup supply of tobacco. These consequences and possible adverse effects are addressed further in the complementary interventions below.

Complementary interventions

A sinking lid system must be introduced in conjunction with a range of aggressive and far-reaching supplementary interventions that would help reduce demand, and thus ensure that the possible adverse effects described above are minimised, and a socially just programme is implemented. Many, but not all, of these interventions are suggested by the Framework Convention on Tobacco Control.

Tobacco industry exit issues

The issues around industry exit from a national tobacco market include: (a) possible threats to exit the market immediately, and (b) the need to ensure that the tobacco companies remain financially and legally accountable for the consequences of their products.65 One method to prevent an industry from inappropriately exiting the country and leaving costs to others is a bond system (where companies must post a bond to be allowed to operate). Before a tobacco endgame system was introduced by any government, this type of bond would need to be considered. Even if a government did not consider an endgame for the medium term, it may still be wise to have such a bond in place. The issues of industry job losses and the need to transition employees to other industries should be addressed as part of the strategy, particularly the question of possible net job losses or gains for a country.66 67

The ideal context required for a sinking lid strategy

We suggest that before such a strategy could be implemented, there needs to be acceptance by the public and politicians that creating a society free from tobacco is a desirable and necessary goal.66 68 This may require investment by health sectors in advocacy,69–71 and political and organisational leadership,72 73 as well as research to investigate the most effective message, framing and communication strategies. Fortunately, in a number of countries there is already a desire for much greater tobacco product regulation.13 14 74–76

There are also contextual factors that may determine the feasibility of a sinking lid approach. Initially, the most likely countries or jurisdictions for the practical application of the strategy may have geographical isolation and/or strong border controls, the absence of a significant tobacco production or cigarette manufacturing sector and a strong central government with relatively low levels of corruption.77 Working examples of the strategy may then enable other countries to follow suit.

To conclude, we argue that it is time to plan for near-zero tobacco smoking prevalence, and to implement the policies to achieve it within the short-to-medium term. We see it as unethical to observe the slow passing of the tobacco epidemic in nearly all jurisdictions, without proposing methods for a predictable and much more speedy end to it. We propose the above sinking lid policy as the key over-arching mechanism to achieve a society free of tobacco.