Cigarettes no less affordable since 2010 despite tobacco tax increases
The affordability of cigarettes in the Netherlands remained virtually unchanged between 2010 and 2020. Throughout this period, 100 packets of cigarettes cost smokers between 2.5 percent and 2.6 percent of their annual income. This has emerged from research by Maastricht University (UM), and makes it clear that the excise duty increases have been insufficient to make smoking less affordable.
According to the researchers, to reduce the affordability of cigarettes and thus discourage smoking, future increases in excise duty should not only be large enough, but should also be introduced regularly. The study on tobacco affordability was published today in the journal Nicotine & Tobacco Research.
The researchers at Maastricht University collected reported incomes and reported prices of purchased cigarettes from 2,765 daily smokers between 2008 and 2020. This allowed them to calculate per person and per year what percentage of annual income was needed to buy 100 packs of cigarettes.
Although the price of a packet of cigarettes did rise slightly each year, incomes also increased. As a result, the relationship between the price of a packet of cigarettes and income did not changed substantially between 2010 and 2020.
The 2020 data was collected before a one-euro excise duty increase in April 2020, which is expected to have led to a change in affordability. ‘The aim of increasing excise duties is that people smoke less, because it makes tobacco less affordable. This in turn produces health benefits,’ says researcher Cloé Geboers, affiliated with UM and the Trimbos Institute. ‘The increases planned for 2023 and 2024, each of around one euro, are a good start.’
The unchanged affordability between 2010 and 2020 shows that the excise duty increases in the Netherlands in this period were insufficient to achieve the desired aim, namely of making cigarettes less affordable. It is therefore crucial that tax increases are not only large enough, but also take place regularly, for example annually, say the researchers.
However, they also stress that it is important to combine excise increases with other measures, especially to support smokers who have more difficulty quitting. ‘Our research has shown that cigarettes are less affordable for people who on average have a lower income, such as women, young adults and people with a lower or intermediate level of education,’ says Geboers. ‘It is therefore particularly important to offer these groups help if they want to quit smoking, for example by providing for health insurance coverage for several therapy treatments a year.’
Affordability is the price of a product relative to income. The affordability of cigarettes is usually calculated according to the Relative Income Price (RIP): the percentage of gross domestic product per capita needed to buy 100 packets of cigarettes.
This study calculated individual RIP: the percentage of a person’s income needed to buy 100 packets of the brand (and type) of cigarettes they usually smoke.