Simon Chapman, Professor of Public Health at Sydney University
1/3/11 responding to a tobacco industry-commissioned report on
tobacco industry knows on which side its bread is buttered, and over
the years, its regular squealing about tax rises have told us all
that tax increases cause painful falls in tobacco consumption –
precisely the point! Cigarette prices have an elasticity of around
-0.4, meaning that a 10% in retail price rises cause a 4% fall in
overall consumption, caused by both quitting and reducing use. Low
income groups like children and the poor have even higher
responsiveness to price rises, with elasticities of up to -1.2 (12%
fall for 10% price rise).
2010 Rudd government excise rise was one of the biggest on record
and roundly applauded by public health groups. The tobacco industry
has shifted its main attack on tax rises from being a concerned
friend to the poor (“prices rises hurt the poor .. so keep the
price low!”) to the idea that they generate significant black
week, an industry-commissioned Deloitte
trumped another industry-commissioned 2010 PriceWaterhouseCoopers
report on the size of the illegal tobacco market in Australia.
In 2010, PWC estimated this at 12.3% of all tobacco then consumed in
Australia: that’s right, get your heads around this one: 1 in 8
cigarettes and roll-your-owns are purchased illegally, the want us
an upper limit of 8.5% of tobacco sold is estimated to be black
market, with most of this occuring in nations with high corruption
indexes like much of Africa and former Soviet states. Our local
tobacco industry is saying that Australia is near the top of
that league. Who would have thought!
Deloitte has gone one better: To quote the release “A Deloitte
report into illegal tobacco in Australia revealed taxpayers are
losing out on almost $1.1 billion in excise revenue as the illegal
tobacco market grows rapidly. The report estimated that 2.68 million
kilograms of illegal tobacco products were sold in Australia during
2010, equivalent to 15.9% of the total legal tobacco market.
Organised crime gangs importing loose leaf tobacco, counterfeit and
contraband cigarettes are now the fourth largest tobacco player in
Australia just behind Imperial Tobacco which holds 17% of the legal
market. British American Tobacco spokesperson, Scott McIntyre said
the annual report highlighted the worrying upward trend in black
market tobacco which pays no excise duty to the Government, is
unregulated and often carries no health warnings.”
these findings of the 2007 National Drug Household Survey which
found that only 0.2% of the population (around 33,000 people) used
blackmarket tobacco more than half the time. The tobacco industry
continues to blow self-serving smoke.
and picture this: unlike the Federal police who are charged with
busting those who sell illegal tobacco and have in the past made
arrests that have seen fines running into the millions, masses of
ordinary smokers are apparently somehow able to do a better job in
finding out where these all these illegal outlets are.
at all the legal cigarette packs that you see in 1,000s of legal
outlets .. divide that by 6 and imagine that that is approx the
number of outlets that these industry sponsored reports would have
us believe are out there.