Effect of price changes in little cigars and cigarettes on little cigar sales: USA, Q4 2011–Q4 2013

Abstract

Introduction Little cigars are comparable to cigarettes in terms of shape, size, filters and packaging. Disproportionate tobacco excise taxes, which directly affect purchase price, may lead consumers to substitute cigarettes with less expensive little cigars. This study estimated the effects of little cigar and cigarette prices on little cigar sales. Methods Sales data from a customised retail scanner database were used to model a log–log equation to infer own-price and cross-price elasticity of demand for little cigars relative to little cigar and cigarette prices, respectively, from quarter 4 of 2011 to quarter 4 of 2013. Data were available for convenience stores (C-stores) (n=29 states); food, drug and mass merchandisers (FDMs) (n=44 states); and C-stores and FDMs combined (n=27 states). The dependent variable was per capita little cigar pack sales, and key independent variables were the price index for little cigars and cigarettes. Results A 10% increase in little cigar price was associated with a 25% (p<0.01) decrease in little cigar sales in C-stores alone, and a 31.7% (p<0.01) decrease in C-stores and FDMs combined. A 10% increase in cigarette price was associated with a 21.5% (p<0.05) increase in little cigar sales in C-stores, and a 27.3% (p<0.01) increase in C-stores and FDMs combined. Conclusions Our results suggest that US cigarette smokers are avoiding the high cost of cigarettes by switching to lower priced little cigars. Increasing and equalising prices among comparable products, like cigarettes and little cigars, may motivate cost-conscious smokers to quit.

Compliance with a Sales Policy on Flavored Non-cigarette Tobacco Products

“…As several other jurisdictions have passed or are considering flavored tobacco product sales restrictions, evaluation of the impact of these policies on retailer compliance and consumer purchasing behavior is informative. For example, whereas product substitution can occur when tax policy creates incentives for consumers to switch from higher priced to lower priced tobacco products, 18 less is known about consumer product substitution of non-flavored tobacco products when flavored tobacco product sales restrictions are implemented.…”

Little Cigars and Cigarillos: Users, Perceptions, and Reasons for Use

“…15,16 As a result, these products are cheaper than cigarettes and are appealing to price-conscious consumers. 16 Additionally, an increase in cigar products that are flavored is believed to have contributed to their rise in use, especially among younger and minority users. 17–19 Historically, flavors have been used by the tobacco industry specifically to recruit new smokers.…”

National and state patterns of concept-flavoured cigar sales, USA, 2012–2016

“…The growth in sales of concept-flavoured cigarillos, even in jurisdictions with long-standing flavoured product sales restrictions, has the potential to undermine efforts to reduce combustible smoking rates in the USA, especially among populations and in regions with the greatest burden. In an attempt to address this issue, many localities in Massachusetts have prohibited concept-flavoured product sales based on their taste or aroma, rather than their specific descriptors 20. Further evaluation of the impact of these approaches on flavoured tobacco sales and use is warranted.…”