The politics of pricing: the relative affordability of cigarettes in Lebanon during the 2019 financial crisis
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Department of Social and Policy Sciences, University of Bath, Bath, United Kingdom
Tobacco Control Research Group, Department for Health, University of Bath, Bath, United Kingdom
School of Management, University of Bath, Bath, United Kingdom
Department of Economics, Faculty of Arts and Sciences, American University of Beirut, Lebanon
Publication date: 2023-04-25
Corresponding author
Hala Alaouie   

Department of Social and Policy Sciences, University of Bath, Bath, United Kingdom
Tob. Prev. Cessation 2023;9(Supplement):A17
Tobacco contributes to the global burden of disease1-3. Decreasing tobacco affordability and hence consumption would reduce the burden of smoking. To achieve that, cigarette price increases need to surpass the rate of economic growth. This is often done through taxation. But a similar decline in affordability can occur in financial crises when consumer incomes drop. Yet, the impact on cigarette consumption is not clear because: i. the relationship between price and affordability is not straightforward, as the affordability of food and non-food items also changes and, ii. tobacco companies use price strategies to affect affordability and maintain demand. To date, neither complexity has been fully explored. We explore both in the case of Lebanon whose economy is in crisis since 2019.

Material and Methods:
Using mixed methods, we consider the price of cigarettes, food, and non-food items and overall inflation to examine affordability and concomitant changes in cigarette consumption. We also draw upon an interview with the state-owned tobacco monopoly (the Regie) to better understand the strategies it adopted.

The prices of cigarettes and food and non-food items increased faster than the overall inflation rate, so they became less affordable. But the drop in cigarette affordability was relatively weaker than for food and non-food items. This can be partly attributed to the Regie's price strategy to maintain demand and ensure the viability of the sector.

A decline in income can have a similar effect to an increase in the price of tobacco through taxation. Changes in effective affordability depend on changes in tobacco affordability relative to changes in the affordability of other products. In the case of Lebanon, cigarette smoking prevalence decreased despite the Regie’s efforts to keep tobacco relatively affordable. While the interventions of a state-owned tobacco monopoly might differ in some ways from those of a transnational tobacco company, this case still holds lessons for understanding tobacco company pricing strategies during economic crises, with important implications for public health.

JRB owns 10 shares in Imperial Brands for research purposes. The shares were a gift from a public health campaigner and are not held for financial gain or benefit. All dividends received are donated to health-related charities, and proceeds from any future share sale or takeover will be similarly donated. Other authors declared no competing interests.
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