Pricing of tobacco products during, and after, the introduction of standardized packaging: an observational study of retail price data from independent and convenience (small) retailers in the United Kingdom

Abstract

Abstract Background and aims Tobacco companies claimed that standardized packaging, phased in/introduced May 2016–May 2017, would reduce prices and increase consumption. We: (1) describe changes in price‐per‐cigarette and price‐per‐gram during, and after, the introduction of standardized packaging; (2) describe price changes by cigarette price segment; and (3) analyse price changes by stage of implementation. Design An observational study, using electronic point‐of‐sale data, monitored price trends in three periods: (1) May–September 2016, start of transition period; (2) October 2016–May 2017, when fully branded and standardized products were sold and duty escalators implemented; and (3) June–October 2017, when standardized packaging was mandatory. Setting United Kingdom. Participants Small retailers (n = 500) stratified by region and deprivation. Data were monitored for 20 leading fully branded tobacco products [15 factory‐made cigarettes (FMC), 5 roll‐your‐own (RYO)] and their standardized equivalents. Measurement Price‐per‐cigarette and price‐per‐gram, based on monthly average Recommended Retail Price (RRP) and actual sale price, adjusted for inflation using the Consumer Pricing Index (CPIH). Net changes (£GBP, %) were analysed by product type (FMC versus RYO) and FMC price segment (value, mid‐price, premium). Findings Between May 2016 and October 2017, the average inflation‐adjusted RRP/price‐per‐cigarette and price‐per‐gram increased for FMC (all price segments) and RYO. For example, sales price‐per‐cigarette increased +4.64%, with the largest increases for value (+6.81%), premium (+5.32%) and mid‐price FMCs (+3.30%). Net sales price‐per‐cigarette and price‐per‐gram increases were largest in period 2, when fully branded and standardized products were sold and duty escalators were implemented (FMC = +4.70%; RYO = +3.75%). There were small decreases in sales price‐per‐cigarette and price‐per‐gram once standardized packaging became mandatory (FMC = –1.14%; RYO = –0.88%). Conclusion In the United Kingdom, the price of leading roll‐your‐own and factory‐made cigarette brands sold by small retailers increased as standardized packaging was phased in, with increases larger than expected through duty escalation.