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 (2019)

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.