Tax, price and cigarette brand preferences: a longitudinal study of adult smokers from the ITC Mexico Survey

Abstract

Background Recent tax increases in Mexico differed in structure and provide an opportunity to better understand tobacco industry pricing strategies, as well as smokers’ responses to any resulting price changes. Objectives To assess if taxes were passed onto consumers of different cigarette brands, the extent of brand switching, and predictors of preference for cheaper national brands. Methods Using data from three waves of the Mexican administration of the ITC Survey, we analyzed self-reported brand and price paid at last cigarette purchase. Generalized estimating equations were used to determine predictors of price and preference for national brands. Results The average price of premium/international brands increased each year from 2008–2011; however, the price for discount/national brands increased only from 2010 to 2011. The percentage of smokers who smoked national brands remained stable between 2008 and 2010 but dropped in 2011. Factors related to smoking national as opposed to international brands included being male and having relatively older age, lower education, lower income, and higher consumption. Conclusions Tobacco industry pricing strategies in the wake of ad valorem taxes implemented in Mexico prior to 2011 had the impact of segmenting the market into discount national brands and premium international brands. The specific tax increase implemented in 2011 reduced the price gap between these two segments, by raising the price of the national brands relative to the international brands. Evidence for trading up was found after the 2011 tax increase. These results provide further evidence for the relevance of tax policy as a tobacco control strategy; in particular, they illustrate the importance of how specific rather than ad valorem taxes can reduce the potential for downward brand switching in the face of decreasing cigarette affordability.

Increasing availability and consumption of single cigarettes: trends and implications for smoking cessation from the ITC Mexico Survey

“…The survey included participants living in 150 census tracts, with an average of 15 participants per census tract in 2012 (range [4][5][6][7][8][9][10][11][12][13][14][15][16][17][18][19][20][21][22].…”

“…10 Data from the Mexican administration of the International Tobacco Control Policy Evaluation Survey (ITC) showed that, despite the long-standing ban on single cigarettes, in 2006, 9.1% of adult smokers bought singles at their last cigarette purchase. 11 There are several potential explanations for the continued prevalence of singles. First, selling singles can be highly profitable for tobacco vendors; single cigarettes are generally sold for more than twice the per-unit price of packaged cigarettes.…”

The use of legal, illegal and roll-your-own cigarettes to increasing tobacco excise taxes and comprehensive tobacco control policies: findings from the ITC Uruguay Survey

“…In recent years, extensive evidence has indicated that many smokers, in particular confirmed smokers, engage in tax avoidance or evasion by switching to cheaper cigarette brands as taxes and prices increase,11–20 and reducing price gaps may incentivise smokers to trade up to higher-priced cigarettes of better quality 20 21. In addition, a handful of studies show that smokers may also switch to cheaper tobacco products (eg, roll-your-own, RYO) or different tobacco products (eg, smokeless tobacco) in response to a change in the relative price or tax 22–26.…”

Cigarette Smoking and Breast Cancer Risk in Hispanic and Non-Hispanic White Women: The Breast Cancer Health Disparities Study

“…It is possible that national cigarette production in Mexico may be considerably different from the international and U.S. brands, and purchasing of these brands may also differ within Mexico. 62 Therefore, when making comparisons across countries, we cannot conclude if women in our study are being exposed to the same cigarette smoking exposures, that is, types of chemicals used in cigarette production. These factors pertaining to cigarette types and brands should be considered with future international studies of smoking and breast cancer.…”