CONFERENCE PROCEEDING
Tobacco affordability, sales and excise revenues in the 28 European Union countries in 2011-2014
 
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Ukrainian Institute for Strategic Studies of the Ministry of Health of Ukraine, Kiev, Ukraine
CORRESPONDING AUTHOR
Konstantin Krasovsky   

Ukrainian Institute for Strategic Studies of the Ministry of Health of Ukraine, Grigorenko, 7а, 02068 Kiev, Ukraine
Publish date: 2017-05-25
Submission date: 2017-04-25
Acceptance date: 2017-04-26
 
Tob. Prev. Cessation 2017;3(May Supplement):85
KEYWORDS
ABSTRACT
Introduction:
The Guidelines for the FCTC Article 6 state: When establishing their levels of taxation, Parties should make tobacco products less affordable over time in order to reduce consumption. The objective is to estimate the impact of changes in tobacco affordability on tobacco consumption and tobacco excise revenues in 2011-2014 in 28 European Union countries.

Material and Methods:
Tobacco affordability index was calculated using the Eurostat data on harmonized consumer price index for tobacco products (adjusted for inflation) and the adjusted disposable income, gross Purchasing Power Standard per inhabitant. The European Commission data on tobacco revenues and tobacco sales (cigarettes and fine-cut tobacco combined) were used.

Results:
Strong correlation between changes of tobacco affordability and tobacco sales is observed in the EU-28. Tobacco consumption declined in the EU-28 in 2011-2014, while tobacco excise revenues were stable. Countries where tobacco became less affordable mainly due to tax and price increases (UK, France, Romania) observed a decline in consumption and growing revenue. Countries, where tobacco became less affordable mainly due to the economic recession (Greece, Spain, Ireland) had a decline in consumption and a reduction in revenue. Countries, where tobacco became more affordable (Lithuania, Bulgaria, Austria) had an increase in consumption and revenue.

Conclusions:
Tobacco taxation can ensure both tobacco consumption decline and revenue increase only if taxation is a key factor of tobacco affordability reduction. Otherwise, in years of economic recession consumption declines, but revenue does not increase; while in years of economic growth revenue increases, but consumption does not decline.

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