Tax increases are essential but insufficient to reduce tobacco consumption

A study conducted by the Institute of Health Economics at the Zurich University of Applied Sciences[1] on behalf of the Lung League and the Swiss Working Group on Tobacco Prevention, examined the question of the effect of tobacco tax increases on smoking behavior. The study draws a comparison between European countries. It shows that an increase in tobacco taxation in countries with relatively strict tobacco control measures is associated with a lower prevalence of smoking.

The comparative study used a comprehensive set of data from the WHO, the World Bank and the Tobacco Control Scale (TCS) covering 27 European countries. It covers the period from 2010 to 2020.

Price influences smoker's smoking behavior

The results show that smokers respond to tobacco tax increases across all countries. In countries with a favorable consumption environment (compared to the 2019 TCS ranking, such as Switzerland or Germany), smokers respond to tobacco tax increases by reducing their cigarette consumption but not quitting. In countries with more comprehensive and stricter anti-smoking measures (such as the United Kingdom or Norway), more smokers quit when prices increase.

According to the World Health Organization (WHO), significantly increasing taxes and prices for tobacco products is the most cost-effective measure to reduce tobacco consumption. The study's calculation model showed that a 10% price increase can lead to a decrease in consumption of up to 9%. The study also confirms that tax and price increases have a greater impact on young people: when prices increase, tobacco consumption decreases two to three times more among young people than among adults. Higher taxes and prices also act as a strong deterrent for young people to start smoking.

Tax increases must be integrated into a comprehensive arsenal of measures

A comprehensive set of tobacco control measures is needed to significantly reduce smoking prevalence. Significant and consistent tax increases are necessary, but not sufficient as a stand-alone measure. The results show that in countries with strict and comprehensive tobacco control regulations (Northern and Western Europe), consumption decreased by an average of 7% between 2010 and 2020, compared to an average of 3% in countries with weaker measures (Southern and Eastern Europe).

The most effective way to sustainably reduce tobacco consumption is to implement comprehensive and proven tobacco control policies, targeting both supply and demand, such as those set out in the WHO Framework Convention (banning tobacco advertising, deploying smoke-free places, banning flavors, health warnings and health packaging, or reimbursement of nicotine replacement products, etc.). These policies help to encourage and maintain cessation and prevent young people from starting to smoke.

Switzerland, an environment favorable to tobacco consumption

The authors highlighted in particular the situation in Switzerland, which has experienced a high and stagnant prevalence for a decade (rising from 27 to 24% of the adult population between 2010 and 2020).

The country, which has still not ratified the World Health Organization's Framework Convention on Tobacco Control (FCTC), is experiencing significant interference from the tobacco industry. Data shows that in most EU countries, tobacco control measures were strengthened between 2010 and 2020, and tobacco taxes increased in almost all countries. In 2020, Switzerland had the lowest total tax burden on cigarettes compared to EU countries and had not increased its taxes since 2013. The currently best-selling cigarette brand (as of October 2021) costs €8.50 per pack of 20 cigarettes, and taxes represent €51.8 billion of the retail price, far from the €75 billion recommended by the WHO. The authors of the study call on the Swiss government to increase tobacco taxes and implement a comprehensive anti-smoking system to sustainably reduce smoking prevalence.

Keywords: Switzerland, taxation, taxes, tobacco, Europe, prices

©Generation Without Tobacco

AE

[1] Andreas Kohler, Linda Vinci, Renato Mattli, Die Wirkung von Tabaksteuern – Die Schweiz im europäischen Ländervergleich, Winterthurer Institut für Gesundheitsökonomie, School of Management and Law, ZHAW, December 7, 2021