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Prices of cigarettes now cheaper in real terms than 10 years ago

March 07, 2002

Cigarettes cost less in real terms than they did 10 years ago, finds research in Tobacco Control. Cigarettes are now cheaper in the UK than they were in the 1960s.

The authors compared price data on cigarettes from more than 80 countries taken from the Economist Intelligence Unit in March 2001. The Big Mac index, an international cost of living indicator, and the most recent international wages and labour survey from the Union Bank of Switzerland were used to determine affordability and minutes of labour needed to buy a pack of cigarettes.

The findings show that prices tend to be higher in developed countries, and where tobacco control policies are in place, such as Australia, Norway, and Hong Kong, and the UK. Minutes of labour needed varied from 10 in Japan and Switzerland, where incomes are high and there are no tax disincentives on cigarettes, to more than 100 minutes in Kenya and India.

With the exception of Poland, prices in many European countries have fallen over the past decade, with brand names, such as Marlboro falling more than local products. In 11 countries out of 42, cigarettes were more affordable in 2000 than in 1990. In Iran, Egypt and Vietnam, prices have tumbled by 50 per cent.

While taxes imposed on cigarettes have increased their price in developed countries, such as New Zealand and Singapore, in the UK, despite recent tax hikes, they are still more affordable than they were in the 1960s.

The authors conclude: "In too many countries, cigarette prices have failed to keep up with increases in the general price level of goods and services, rendering them more affordable in 2000 than they were at the beginning of the decade. The trends outlined suggest there is ample room to increase tobacco taxes."

British Medical Journal (BMJ)

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