Lobbyists want pricier tobacco

Tobacco companies have been warned they are treading a fine line after reports of price wars.

The Health Ministry began investigating cigarette pricing structures after The Timaru Herald reported last month that tobacco giant British American Tobacco New Zealand had issued a new price list to retailers, recommending a drop in price for some of their brands.

Associate health minister Tariana Turia said she was expecting feedback by the end of this month after launching an inquiry into why British American Tobacco and Imperial had cut prices.

“It is outrageous that on one hand, the government is spending millions of taxpayers’ money to stop smoking addiction and on the other hand, these companies are enticing smokers to consume more.

“If the report says the tobacco companies are in breach of the act, then I’ll have no hesitation in recommending they be taken to court.”

Mrs Turia told the Herald she was considering advice from the Health Ministry on price increase levels and current legislation on tobacco pricing.

“I am particularly concerned that loose tobacco or roll-your-owns are smoked by about 50 per cent of smokers and the price hasn’t increased since 1995.

“I would like to see an increase that is effective in reducing the number of smokers and preventing any further people from taking it up.”

International research showed that increasing the price of tobacco was one of the proven ways to reduce smoking, Mrs Turia said.

Meanwhile, smokers could be paying $20 for a packet of tailor-made cigarettes if health lobbyists have their way.

The Australian Government has announced plans to introduce sharp tax increases, plain labelling and ban internet sales and media campaigns on tobacco.

They aim to cut the number of smokers in Australia by one million through progressively raising the price of cigarettes to $20 for a packet of 30.

Action on Smoking and Health director Ben Youdan said increasing the price was effective.

“The proposed increase in Australia will certainly be accompanied by significant drops in cigarette use and improved health for Australians. A price increase by as little as 10 per cent is likely to cause consumption to drop by around 2 per cent.”

Mr Youdan said he hoped pressure from across the Tasman would spur Treasury into action.

“New Zealand has nearly reached a decade without any tobacco tax increase and that would be a shameful milestone of not acting on such a highly effective tool to reduce the harm from smoking.”
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Reports of tobacco price hikes across the Tasman come as new evidence suggesting roll-your-own cigarettes could be more dangerous than factory-made cigarettes.

A study released yesterday found roll-your-own smokers inhale more smoke.

Mr Youdan said New Zealand tax laws had driven smokers towards roll-your-owns.

“Tobacco is taxed by weight in New Zealand.

“This research highlights that unless urgent action is taken to make rollie smoking as expensive as factory made cigarettes, any tax increase risks shifting even more smokers to these highly dangerous smokes.”

Maori Smokefree Coalition director Shane Bradbrook said Maori were big smokers of roll-your-owns and called on the Government to increase tax on loose tobacco.

Mr Bradbrook said a survey in 2006 found 60 per cent of Maori smokers smoked rollies, compared with 49 per cent of European and 23 per cent of Pacific Island smokers.

“When coupled with specific populations such as Maori, 60 per cent of smokers use roll-your-own tobacco.

“It is attractive to populations that are more likely to be from lower socio-economic groups.”

Putting up the price of tobacco would encourage smokers to quit, Mr Bradbrook said.

“The bottom line is that the Government needs to, at a minimum, harmonise the tax on roll-your-owns with manufactured cigarettes to lessen the price incentive to continue purchasing roll-your-own tobacco.

“It is more likely that smokers will opt to quit if price is an issue, particularly in this recession.”
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