Pricing of Tobacco Products During, and After, the Introduction of Plain Packaging

In 2016 the UK government introduced a policy that required factory-made cigarettes and roll your own tobacco to be sold in plain packaging with pictorial and text warnings.

However, there was reluctance from tobacco companies to “make the pack the hero”. The tobacco companies claimed that the introduction of plain packaging would leave the price as the only comparable feature, would increase competition between companies, affordability of product and consumption.

A recent observational study has investigated whether a phased introduction of the policy would reduce prices and increase consumption. The researchers monitored the price trends from different retailers at three different periods.

The results found that overall the price of factory-made cigarettes and roll your own tobacco products increased during the introduction of plain packaging in the United Kingdom. The increase was most notable in the second observation phase when both fully branded and plain products were sold and duty escalators implemented. There was a small decrease in prices following the mandatory introduction of plain packaging after June 2017.

The results suggest that the concerns of the tobacco companies that the introduction of plain packaging would decrease prices leading to increase in consumption were unfounded. 

Citation
Critchlow, Nathan, Martine Stead, Crawford Moodie, Kathryn Angus, Douglas Eadie, and Anne Marie MacKintosh. "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." Addiction (2018).
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