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Price of a packet of cigarettes to rise, after Spring Budget changes
The price of a packet of 20 cigarettes will rise by an average of 95 pence from 6pm on Wednesday as part of measures announced in the spring Budget.
Chancellor Jeremy Hunt announced all tobacco products will increase by 2 per cent above RPI and hand-rolling tobacco by 6 per cent above RPI. The changes add 95p to the price of a packet of 20 cigarettes, £1.75 to a 30g packet of hand-rolling tobacco, 48p to a 10g packet of cigars, 63p to a 30g packet of pipe tobacco and 24p to tobacco for heating packs, according to figures provided by Action on Smoking and Health (ASH).
The Minimum Excise Tax (MET) on cigarettes and the price at which it applies has been uprated by an additional 1 per cent to 3 per cent above RPI. The new MET will be £7.87, rising from £6.96 for a packet of 20 and will apply to cigarettes sold at or below £11.97 – having previously been £10.30.
While Mr Hunt did not comment directly on the rising cost of cigarettes, the move is likely to be welcomed by health groups that would be glad of any disincentive for smokers.
The government is pushing for the UK to be “smoke free” by 2030.
An ASH statement said: “Action on Smoking and Health and the Spectrum public health research consortium welcomed today’s increase in tobacco taxes of 2 per cent above inflation for cigarettes. For this year that will mean a 95p increase on a pack of 20 cigarettes. Reducing the affordability of tobacco is recognised to be the most effective way of reducing smoking prevalence and the higher the escalator above inflation, the greater the impact it has and the greater the potential to save lives.”
The statement added: “However, we are disappointed that the Chancellor did not accept our recommendation to change from RPI to average earnings as the foundation for the tobacco tax escalator. RPI is not a good measure of affordability particularly at the current time when wages are not keeping pace with inflation.”
Source: The Evening Standard, 15 March 2023
See also: ASH - Tobacco tax rises welcomed by ASH and SPECTRUM but concerns raised
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Philip Morris survey: Retailers fear cost of living could boost illicit tobacco consumption
Philip Morris Limited (PML) asked 250 UK convenience retailers a series of questions on what trends may emerge in the tobacco and smoke-free categories in 2023. On the issue of illicit tobacco, over half (51%) of responding convenience stores said they felt concerned that the current economic climate will increase the consumption of cheap, illicit cigarettes this year.
In response to the rising cost-of-living, 46% of retailers also plan on expanding their smoke-free product range to offer adult smokers more affordable alternatives, such as e-cigarettes, heat-not-burn products, and nicotine pouches.
Source: Talking Retail, 14 March 2023
Editorial note: The market share of illicit tobacco is available through HMRC’s tax gap data. The market share for both cigarettes and hand-rolling tobacco has remained static over the most recent three years of data available at 9% and 34% respectively. Previous evidence has found that there is not a strong relationship between the price of tobacco and the level of illicit tobacco. You can read more on this topic in our tobacco taxation and illicit trade factsheet.
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British American Tobacco urged to quit London for US
British American Tobacco is facing pressure to move its primary listing to New York after a top-five shareholder said it “makes no sense” for the cigarette maker to remain on the UK stock market.
Rajiv Jain, founder of $92bn US-based investment firm GQG Partners, told the Financial Times he had urged the management of the FTSE 100-listed owner of Lucky Strike and Dunhill to call time on a London listing that dates back to 1912.
BAT is an “orphan in Europe”, said Jain. “The core ownership base [of BAT] has disappeared. It makes no sense for them to remain there.”
He pointed to the US-centric nature of the FTSE 100 company’s business and the valuation gap between BAT and its US-listed peer Philip Morris International, where GQG is a top-10 shareholder, asking: “What’s the point of remaining listed in London?”
The US accounted for about two-fifths of BAT’s £27.6bn in global revenues last year on a constant currency basis, making it the cigarette maker’s biggest market. BAT’s US subsidiary Reynolds owns the popular Newport and Camel cigarette brands, while BAT’s Vuse vape has a 41 per cent market share in the e-cigarette category, according to Nielsen data.
Source: The Financial Times, 16 March 2023
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Asked by Andrew Gwynne, Labour, Denton and Reddish
To ask the Secretary of State for Health and Social Care, what assessment he has made of the financial cost of smoking to the NHS.
To ask the Secretary of State for Health and Social Care, what estimate he has made of the cost of smoking to the UK economy.
Answered by Neil O'Brien, Minister for Primary Care and Public Health
The cost of smoking to the National Health Service is £2.4 billion each year. On the cost of smoking to the economy, we do not collect information for the United Kingdom as a whole.
Source: Hansard, 13 March 2023
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Asked by Rachael Maskell, Labour, York Central
To ask the Secretary of State for Health and Social Care, if he will reduce the nicotine levels allowed in vaping devices.
Answered by Neil O'Brien, Minister for Primary Care and Public Health
There are no current plans to reduce nicotine levels beyond those set out in the Tobacco and Related Products Regulations 2016.
Source: Hansard, 13 March 2023
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Asked by Dr Matthew Offord, Conservative, Hendon
To ask the Secretary of State for Health and Social Care, if he will take steps to convene a round table of companies manufacturing disposable vaping devices on steps to ensure those products are not marketed or used by children.
Answered by Neil O'Brien, Minister for Primary Care and Public Health
There are no current plans to convene a round table of companies manufacturing disposable vaping devices. However, alongside the Medicines and Healthcare products Regulatory Agency, my officials regularly meet with the Independent British Vape Trade Association and their members to ensure these products are not marketed or used by children.
Source: Hansard, 13 March 2023
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Asked by Rachael Maskell, Labour, York Central
To ask the Secretary of State for Health and Social Care, if he will publish a strategy to tackle the rise in young people vaping.
Answered by Neil O'Brien, Minister for Primary Care and Public Health
There are no current plans to publish a strategy on youth vaping, but the Government will keep this under review.
We have a range of measures in place to prevent vapes being used by young people. The law restricts sales to over 18 years of age only, limits nicotine content, refill bottle and tank sizes, and has specific requirements on labelling and through advertising restrictions. In October 2022, we published new content on the potential risks of vaping on the Talk to Frank and Better Health websites and we have also developed a suite of resources for schools to use on vaping.
Source: Hansard, 13 March 2023
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Asked by Peter Gibson, Conservative, Darlington
To ask the Secretary of State for Health and Social Care, if he will make an assessment of the potential merits of making the sale of cigarettes subject to a system of licensing to help prevent the prevalence of illegal cigarettes.
Answered by Neil O'Brien, Minister for Primary Care and Public Health
An assessment provided in the Khan Review suggests a retailers' licensing scheme would reduce underage and illicit sales and protect law abiding businesses. We will shortly be unveiling a wide-reaching set of proposals to support our ambition to be Smokefree by 2030, and this will include action to further tackle illicit tobacco.
Source: Hansard, 14 March 2023
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Asked by Rachael Maskell, Labour, York Central
To ask the Secretary of State for Health and Social Care, if he will work with the Secretary of State for Education to ensure that all young people are taught about the addictive nature of vaping and that it forms part of the health education programme in schools.
Answered by Neil O'Brien, Minister for Primary Care and Public Health
The Department of Health and Social Care and the Department for Education are working closely to ensure that children are taught the facts about vaping, including that nicotine is addictive. This is part of a range of actions the Department of Health and Social Care is taking to ensure that young people are aware of the risks of using vapes. In October 2022, we published new vaping content on the Talk to Frank and Better Health websites and we have also developed a suite of resources for schools to use, including the recently published Year 9 lesson plan published by the PSHE Association available at the following link:
https://pshe-association.org.uk/resource/vaping?hsLang=en
On 8 March, the Prime Minister announced that the Department for Education is bringing forward the review of the relationships, sex and health education statutory guidance which will give stakeholders the opportunity to look at where new content is needed, and existing content can be strengthened. The Department for Education will consider whether content on vaping should be included. The revised statutory guidance will be published in 2024.
Source: Hansard, 14 March 2023
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Asked by Kirsten Oswald, Scottish National Party, East Renfrewshire
To ask the Secretary of State for Environment, Food and Rural Affairs, what steps she is taking with Cabinet colleagues to reduce the environmental harms of disposable vapes.
Answered by Rebecca Pow, Under Secretary of State at the Department for Environment, Food and Rural Affairs
We are aware that the use of disposable vaping products has increased substantially in recent years and are considering the implications of this trend for the environment. As part of our wider review of the Waste Electrical and Electronic Equipment Regulations, we will consult on policies aimed at driving up levels of separate collection of electric and electronic waste, including vaping devices, later this year.
Source: Hansard, 14 March 2023
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Asked by Kirsten Oswald, Scottish National Party, East Renfrewshire
To ask the Secretary of State for Environment, Food and Rural Affairs, whether she has had discussions with representatives of the vaping industry on the environmental impact of electronic cigarettes.
Answered by Rebecca Pow, Under Secretary of State at the Department for Environment, Food and Rural Affairs
The Secretary of State has not had any discussions with representatives of the vaping industry on the environmental impact of electronic cigarettes.
Source: Hansard, 14 March 2023
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Asked by Rachael Maskell, Labour, York Central
To ask the Secretary of State for Health and Social Care, if he will bring forward a ban of vaping in public enclosed places to prevent chemicals from vapes being exhaled in those spaces.
Answered by Neil O'Brien, Minister for Primary Care and Public Health
The Government has no plans to ban vaping in public enclosed places. In 2016, the Government published guidance to inform evidence-based policy making on vapes in public places and available at the following link:
https://www.gov.uk/government/publications/use-of-e-cigarettes-in-public-places-and-workplaces
Organisations are able to use this guidance should they wish to implement their own evidence-based polices.
Source: Hansard, 13 March 2023
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ASH Daily News is a digest of published news on smoking-related topics. ASH is not responsible for the content of external websites. ASH does not necessarily endorse the material contained in this bulletin.
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