Analysis of the illicit tobacco market in Georgia in response to fiscal and non-fiscal tobacco control measures

Little, Megan; Ross, Hana; Bakhturidze, George; Kachkachishvili, Iago

doi:10.1136/tobaccocontrol-2020-056404

Cited by 9 publications

(5 citation statements)

References 5 publications

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“…Thus, the tax increase influences the prices of legal products and illegal ones. This has been observed elsewhere 29. Illicit brand price increase may have been additionally motivated by the cigarette import ban.…”

Section: Discussionmentioning

confidence: 63%

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Response of legal and illegal cigarette prices to a tax increase in Ethiopia

Mengesha

Ross

2023

Tob Control

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BackgroundIn 2020, Ethiopia passed a landmark tax proclamation implementing an evidence-based mixed excise system aimed at curbing tobacco use. This study evaluates the impact of the tax increase of more than 600% on both legal and illegal cigarette prices in order to gauge the impact of the tax reform in the presence of a sizeable illicit cigarette market.MethodsData on 1774 cigarette prices were obtained from retailers during Empty Cigarette Pack Surveys in the capital and major regional cities conducted in 2018 and 2022. Packs were categorised as ‘legal’ or ‘illicit’ using criteria from the tobacco control directives. Descriptive and regression analyses were used to study the cigarette price changes during the period of 2018–2022, capturing the impact of the 2020 tax increase.ResultPrices of both legal and illegal cigarettes increased in response to the tax increase. In 2018, the stick prices ranged from ETB0.88 (Ethiopian birr) to ETB5.00 for legal cigarettes while they ranged from ETB0.75 to ETB3.25 for illegal ones. In 2022, a legal stick sold for ETB01.50–ETB2.73 and an illegal stick for ETB1.92–ETB8.00. The average real price of legal and illegal brands increased by 18% and 37%, respectively. The multivariate analysis confirms that prices of illicit cigarettes grew faster compared with the legal ones. By 2022, illicit brands were on average more expensive compared with their legal counterparts. This result is statistically significant at p<0.01.ConclusionThe prices of both legal and illegal cigarettes increased following the 2020 tax increase, with the average real cigarette price increasing by 24%. As a result, the tax increase likely had a positive impact on public health despite a sizeable illicit cigarette market.

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Section: Discussionmentioning

confidence: 63%

“…This has been observed elsewhere. 29 Illicit brand price increase may have been additionally motivated by the cigarette import ban.…”

Section: Original Researchmentioning

confidence: 99%

Response of legal and illegal cigarette prices to a tax increase in Ethiopia

Mengesha

Ross

2023

Tob Control

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“…The second set of parameters relates to whether the tobacco industry changes prices. Little et al 11 find that the price of illicit cigarettes is roughly proportionate to the price of cheap legal cigarettes. Therefore, we assume that the illicit price is a proportion ( ρ ) of the price of the cheapest legal cigarettes.…”

Section: Methodsmentioning

confidence: 99%

How much to pay for a track and trace system: a simulation model for South Africa

2022

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BackgroundThe illicit trade in tobacco reduces the effectiveness of tobacco-control policies. Independent track and trace (T&T) systems are considered one of the most effective measures available to reduce the illicit tobacco trade. South Africa, with an illicit trade estimated at over 35% of the total market, is yet to implement a T&T system.MethodsAn Excel-based simulation model is used to determine the break-even T&T marker cost per pack. At the break-even cost per pack, the government would recover all costs associated with implementing T&T by collecting additional revenues. We conduct a scenario analysis to provide a range of break-even marker costs.FindingsA marker cost of between R2.68 (US$0.17) and R5.24 (US$0.34) per pack allows the South African government to collect enough additional revenue to recover all costs associated with T&T. Implementing such a system would reduce cigarette consumption by between 5% and 11.5%. Given that comparable systems cost significantly less than this range (roughly US$0.02 per pack), the government would in all likelihood be able to implement a system at a cost below the break-even rate, thus generating additional revenue.ConclusionThe break-even simulation model provides a practical tool for the government to plan the implementation of T&T and to set up an evaluation criteria for the T&T tender process. The simulations illustrate that implementing T&T in South Africa would both reduce consumption (licit and illicit) and generate additional revenue. With some modifications, the model can be applied to other countries as well.

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“…59 Similarly, the TI has used exaggerated estimates of illicit trade to offset tax hikes in other countries such as South Africa, Vietnam and Georgia. [60][61][62] Furthermore, data on cigarette prices in Ethiopia show that, despite price rises in both legal and illicit products following the excise tax modification in 2020, the price of legal products remains lower than the price of illicit cigarettes. 63 This implies that factors other than tobacco tax drive the illicit tobacco trade in Ethiopia.…”

Section: Original Researchmentioning

confidence: 99%

Tobacco industry corporate social responsibility activities and other interference after ratification of a strong tobacco law in Ethiopia

Mengesha,

Brolan,

Gartner

2023

Tob Control

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BackgroundSince strict new tobacco control laws were introduced in 2019 and 2020, the National Tobacco Enterprise (NTE), the main manufacturer and distributor of cigarettes in Ethiopia, strategically engaged in corporate social responsibility (CSR) activities and other tactics to interfere in tobacco control policymaking. This study systematically identified and reviewed tobacco industry activities that undermine Ethiopia’s strict new tobacco control laws.MethodsWe collated, reviewed and analysed evidence on tobacco industry CSR activities from February 2019 to November 2022 in Ethiopia, including newspapers, organisational websites, social media and government documents related to tobacco industry activities, contract agreements and other policy interference attempts.ResultsNTE’s CSR activities included: (1) Funding educational programmes (eg, postgraduate scholarships); (2) Community service (eg, donating COVID-19 prevention materials, providing water, sanitation and hygiene supplies); and (3) Supporting government programmes (eg, greening initiatives and training programmes). NTE facilitated CSR activities via a contract agreement with the Ethiopian government that was created when Japan Tobacco International purchased the Government’s majority share in NTE. NTE subsequently partnered with the Japanese Embassy in Addis Ababa and private law firms on CSR activities. The tobacco control community stopped NTE distributing free COVID-19 prevention products in Addis Ababa but had limited impact on other identified breaches of laws prohibiting tobacco advertising promotion and sponsorship.ConclusionThe new laws have not stopped NTE using multiple CSR activities to interfere in tobacco control policy. Regular monitoring of tobacco industry CSR activities to identify potential breaches is recommended. Moreover, the Ethiopian government should revise its contractual agreement with NTE to end NTE’s participation in law-making processes and partnerships on illicit tobacco control.

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Analysis of the illicit tobacco market in Georgia in response to fiscal and non-fiscal tobacco control measures

Cited by 9 publications

References 5 publications

Response of legal and illegal cigarette prices to a tax increase in Ethiopia

Response of legal and illegal cigarette prices to a tax increase in Ethiopia

How much to pay for a track and trace system: a simulation model for South Africa

Tobacco industry corporate social responsibility activities and other interference after ratification of a strong tobacco law in Ethiopia

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