Smoke signals: monitoring illicit cigarettes and smoking behaviour in Colombia to support tobacco taxes

Abstract

BackgroundA street cross-sectional survey in 2016 with a representative sample of 1697 smokers in five Colombian cities was used to estimate the penetration of illicit cigarettes (PIC). The first wave was collected 3 months before a 100% increase in tobacco excise tax, and a second wave collected data 9 months after tax reform was effective.Objective Analyse changes after a cigarette tax increase in PIC, prices and smoking behaviour patterns for five Colombian cities (63% of the market). Smoking behaviour includes consumption intensity, presentation (stick/pack) and place of purchase.Methods Repeated street cross-sectional survey with smokers’ self-report on smoking behaviour, last purchase information and direct observation of smokers’ packs. Sampling frame: smokers, men and women, aged 12 years or older, all income levels, resident in the five cities with the highest number of smokers representing 63% of cigarette market share (Bogotá, Medellín, Cali, Cartagena and Cúcuta) with 1 733 316 smokers in 2013. Sample size was 1697 per wave, with confidence level 95%, margin of error 3.5% for Bogotá and Medellín and 5% for the other three cities. Smokers in second wave match first wave’s location, sex and age group. Illicit cigarettes were identified based on brand, health warnings and price.Results After the tax hike, the average real price of a 20-stick pack increased by 28.2% and by 23.1% for loose cigarettes. Illicit cigarettes represented 3.4% of total cigarette consumption in 2016 and increased to 6.4% in 2017, lower than the current industry estimate of 18%. Consumption intensity decreased: the proportion of heavy smokers (more than 10 cigarettes per day) wentdown from 37% in 2016 to 26% in 2017.ConclusionAfter the tax increase, Colombia’s PIC remained at low levels, and there is enough space for new tobacco tax hikes.

Illicit tobacco trade: empty pack survey in eight Argentinean cities

“…7 Moreover, national tobacco manufacturers, who focus on low-cost cigarettes, filed an injunction (still in force as of February 2021) to prevent the application of this tax floor that would make their products less affordable. Although it has been suggested that the prevalence of ITT in the Latin American region could be one of the highest worldwide, 8 there is a growing body of evidence suggesting that the tobacco industry grossly overestimates ITT, [9][10][11][12][13] including in Latin American countries such as Colombia, 14 Chile 15 and Mexico. 16 Argentina has procedures in place to control illicit trade practices, such as the TRAFIP track-and-trace system launched in 2010 by the country's internal revenue service, AFIP (Administración Federal de Ingresos Públicos).…”

Price smoking participation elasticity in Colombia: estimates by age and socioeconomic level

“…This estimate of PPE could be compared against recent cigarette tax increases between 2016 and 2017. Real prices have increased by around 28.2% for a packet of 20 cigarettes, and 23.1% for loose cigarettes 2. Given this increase, we should expect a decrease in smoking prevalence between 14.55% and 18.05%.…”

“…In recent decades, the government of Colombia has implemented policies to prevent, discourage and reduce smoking. Particularly, increases in tobacco taxes have increased consumer prices 2. Tobacco consumption is an important public health issue, and preventive regulatory actions can substantially influence aggregate smoking in the long-term 3–6.…”

The estimated benefits of increasing cigarette prices through taxation on the burden of disease and economic burden of smoking in Nigeria: A modeling study

“…Where Prev B is the baseline prevalence of smoking before price increase; α is the market share of licit tobacco products; ε d is the price elasticity of demand for tobacco products; ε cp is a pseudo cross-price elasticity of demand between illicit and legal cigarettes (obtained from literature [ 17 ]); Δ P is the percentage change in price for each scenario (25%, 50% or 75%); and I p is the proportion of the variation on cigarette consumption expected to impact on smoking prevalence, that in the short term, the first 5 years of the simulation, it was assumed that 50% of the reduced consumption is a consequence of the reduction in prevalence ( I p . = 0.5) to represent as conservative scenario, while in the long run the I p would be assume equal to 75% representing a greater impact of the price change over the prevalence.…”

“…Finally, several international sources reporting utility values on a 0–1 scale for the construction of QALYs were also used [ 23 – 37 ] (see S2 Appendix ). Regarding economic parameters, the own-price elasticity (-0.496) [ 38 ],the cross-price elasticity between licit and illicit tobacco (0.17) [ 17 ] and tobacco tax revenue in local currency, which is Nigerian Naira (₦), (₦36,3 billion) were obtained from previous studies [ 39 ]. Further economic parameters needed for comparison purposes were extracted from the World Development Indicators [ 40 ] considering the latest available data at July 2020: Nigerian GDP (₦145,639 billion), National health expenditure as a percentage of GDP (3.76%), and exchange rate (1 U$D = ₦306.92).…”