Economic and public health impact of 2007–2010 tobacco tax increases in Ukraine

Ross, Hana; Stokłosa, Michał; Krasovsky, Konstantin

doi:10.1136/tc.2010.040071

Cited by 29 publications

(36 citation statements)

References 13 publications

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“…The impact this can have on profits is illustrated by BAT's estimation in 2006 that simply shifting sales of 1 billion sticks (by my estimate just 1% of BAT's Russian market share at that time) from a low priced brand to a premium priced brand would provide an additional £20 million in revenue 37. Consequently, Russia, similar to Ukraine38 and most of the Eastern European region it dominates, has in the past few years shifted from being a volume to a value growth market (as figure 2 illustrates, this region shows the most marked value growth in recent years). This suggests the initial aim was to rapidly increase volumes regardless of profits; once volumes were large enough and the regional economies strong enough, prices were increased, the overall plan ensuring long term profits.…”

Section: Resultsmentioning

confidence: 99%

Understanding the vector in order to plan effective tobacco control policies: an analysis of contemporary tobacco industry materials

Gilmore

2012

Tob Control

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Background This paper builds on tobacco document research by analysing contemporary materials to explore how the global tobacco market has changed, how transnational tobacco companies (TTCs) are responding and identify the implications for tobacco control. Methods Analysis of a variety of materials including tobacco company annual reports, investor relations materials, financial analyst reports, market research reports and data. Findings Once China, where TTCs have little market share, is excluded, global cigarette volumes are already declining. Nevertheless, industry profits continue to increase. This pattern is explained by TTCs’ pricing power - their ability to increase prices faster than volumes fall; a consequence of market failure. Pricing power is now fundamental to the TTCs’ long-term future. Consequently, and in light of growing regulations, the TTCs’ business model is changing. Product innovation is now a key marketing technique used to drive consumers to buy more expensive (ie profitable) premium cigarettes. Contrary to established wisdom, high tobacco excise rates, particularly where increases in excise are gradual, can benefit TTCs by enabling price (profit) increases to be disguised. Large intermittent tax increases likely have a greater public health benefit. TTC investments in smokeless appear designed to eliminate competition between smokeless and cigarettes, thereby increasing TTCs’ pricing power while enabling them to harness the rhetoric of harm reduction. Conclusions Monitoring TTCs can inform effective policy development. The TTC’s value maximising approach suggests that a ban on product innovation and more informed tobacco excise policies are needed.

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Section: Resultsmentioning

confidence: 99%

Understanding the vector in order to plan effective tobacco control policies: an analysis of contemporary tobacco industry materials

Gilmore

2012

Tob Control

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“…Kyrgyzstan is particularly weak, with bans only in place in health and education facilities (web-only material table A). The share of taxes in the retail price of cigarettes also remains low, generally between 20% and 30% (and just 18% in Kyrgyzstan), with the exception of Georgia and Ukraine, which now have taxation rates of 61% and 70%, respectively (web-only material table A) 1 13 14. Consequently, the price of cigarettes is also relatively low (web-only material table A).…”

Section: Introductionmentioning

confidence: 99%

Knowledge of the health impacts of smoking and public attitudes towards tobacco control in the former Soviet Union

et al. 2012

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Aim To describe levels of knowledge on the harmful effects of tobacco and public support for tobacco control measures in nine countries of the former Soviet Union, and to examine the characteristics associated with this knowledge and support. Methods Standardised cross-sectional, nationally representative surveys conducted in 2010/11 with 18000 men and women aged 18 years and above in Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, and Ukraine. Respondents were asked a range of questions on their knowledge of the health effects of tobacco and their support for a variety of tobacco control measures. Descriptive analysis was conducted on levels of knowledge and support, along with multivariate logistic regression analysis of characteristics associated with overall knowledge and support scores. Results Large gaps exist in public understanding of the negative health effects of tobacco use, particularly in Azerbaijan, Kazakhstan, Kyrgyzstan, and Moldova. There are also extremely high levels of misunderstanding about the potential effects of ‘light’ cigarettes. However, there is popular support for tobacco control measures. Over three quarters of the respondents felt that their governments could be more effective in pursuing tobacco control. Higher levels of education, social capital (membership of an organisation) and being a former or never smoker were associated with higher knowledge on the health effects of tobacco and/or being more supportive of tobacco control measures. Conclusions Increasing public awareness of tobacco’s health effects is essential for informed decision-making by individuals and for further increasing public support for tobacco control measures.

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“…Moreover, while the industry initially attempted to keep taxes and prices low in the countries that were created after the breakup of the former Soviet Union, recent evidence from Ukraine indicates a shift in the industry's strategy. Rather than shielding consumers from the impact of smaller tax hikes in 2007-2008, the industry is over-shifting the recent larger tax increases, increasing their net-of-tax price (Ross, Stoklosa, & Krasovsky, 2012). Tobacco companies can employ a variety of marketing techniques that lower the price of or otherwise add value to their products.…”

Section: Industry Efforts To Influence Tax Policy and Industry Pricinmentioning

confidence: 99%

Price and Tax Measures and Illicit Trade in the Framework Convention on Tobacco Control: What We Know and What Research Is Required

Walbeek

Blecher

Gilmore

et al. 2012

Nicotine & Tobacco Research

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introduction: Article 6 of the Framework Convention on Tobacco Control commits Parties to use tax and price policies to reduce tobacco use, whereas Article 15 commits Parties to implement measures to eliminate the illicit trade in tobacco products. This paper identifies research gaps/needs, especially in low-and middle-income countries, which, if adequately addressed, would help in implementing Articles 6 and 15.Methods: Based on a recent comprehensive review on the impact of tax and price on tobacco consumption and a summary of reviews and narratives about the illicit tobacco market, research gaps are identified.Results: Countries have highly diverse research needs, depending on the stage of the tobacco epidemic, previous research and data availability, and making a ranking of research needs infeasible. Broad issues for further research are the following: (1) monitoring tobacco consumption, prices, and taxes, (2) assessing the effectiveness of the tax structure in generating revenue and reducing tobacco use, (3) strengthening the tax administration system in order to reduce tax evasion and tax avoidance, (4) improving our understanding of the political economy of tobacco tax policy, and (5) employing a multidisciplinary approach to assessing the magnitude of illicit tobacco trade. Conclusions:At a technical level, the case for increasing excise taxes to improve public health and increase government revenue is easily made, but the political and policy environment is often not supportive. In order to effectively impact policy, the required approach would typically make use of rigorous economic techniques, and be cognizant of the political economy of raising excise taxes. inTRoduCTionThe World Health Organization's Framework Convention on Tobacco Control (FCTC) sets out a number of measures that aim to reduce the demand for (Articles 6-14) and supply of tobacco (Articles 15-17). The focus of this paper is on Article 6, and to a lesser extent on Article 15. Article 6 (Box 1) commits the Parties to implement tax policies (and where appropriate, price policies) that aim to reduce tobacco consumption, while Article 15 (Box 2) aims to eliminate the illicit trade in tobacco products.As a framework treaty, the FCTC does not provide specific detail on best practices and how Parties should implement the treaty but rather leaves it to a series of Protocols and Guidelines which are negotiated at a later stage. Guidelines provide recommendations on the implementation and/or interpretation of treaty obligations while protocols are legally binding and introduce new obligations. A Protocol on the illicit trade in tobacco products has been negotiated and a working group to develop Guidelines for Article 6 has been established. Both the Protocol and the Guidelines are on the agenda for adoption at the Conference of the Parties in November 2012.Article 6 encourages the Parties to increase the tax on cigarettes, which would increase their retail prices, make cigarettes less affordable and thus discourage consumption. Since ...

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Economic and public health impact of 2007–2010 tobacco tax increases in Ukraine

Cited by 29 publications

References 13 publications

Understanding the vector in order to plan effective tobacco control policies: an analysis of contemporary tobacco industry materials

Understanding the vector in order to plan effective tobacco control policies: an analysis of contemporary tobacco industry materials

Knowledge of the health impacts of smoking and public attitudes towards tobacco control in the former Soviet Union

Price and Tax Measures and Illicit Trade in the Framework Convention on Tobacco Control: What We Know and What Research Is Required

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