The tobacco industry has millions of dollars to invest in marketing and lobbying, and increasingly tough government measures are forcing cigarette companies to be inventive to stay in the market.
The Daily Telegraph recently reported that one cigarette brand, British American Tobacco Australia, has started selling inexpensive cigarettes in a bid to keep customers despite prohibitive taxes.
The brand claims to be the cheapest on the market, aiming to entice budget conscious smokers.
The restrictions on tobacco companies in Australia have become some of the most onerous in the world: including legislation requiring that cigarettes must be in plain packaging and contain large health warnings.
Even shopper loyalty programs are banned.
Cigarettes are kept out of sight of members of the public and can only be sold at one point of sale within a retail store. It is prohibited to advertise them and the amount of smoke free places in Australia is growing.
Cigarette prices have skyrocketed. While some smokers will quit or limit their smoking, others will cut back their spending in other areas, even food, in order to be able to continue affording their cigarettes.
The move to make cigarettes more expensive is primarily aimed at putting them out of reach of young, non-smokers and to thereby deter them from starting.
In light of all these restrictions, the question crops up from time to time, is the next step to ban cigarettes entirely?
This seems like a very drastic step, but following on from the gradual restrictions that are applied to cigarettes, it is not unforeseeable.
Smoking is a recognised health problem and kills more people than AIDS, skin cancer, diabetes and road accidents combined.
There is even an international movement proposing to ban cigarettes for anyone born after 2000.
Those against a ban of cigarettes doubt it would be effective – and you only have to look at the thriving market for illicit drugs or the prohibition of alcohol about one century ago to know that a market for cigarettes would doubtless exist.
The debate has cropped up from time to time over the past few years but has failed to garner significant public or government support.
Why is this?
With the federal government strapped for cash, the banning of a multi-billion dollar revenue raising industry doesn’t look like it is going to happen anytime soon.
Governments love cigarettes, or at least the coffers of our treasury do. Money from cigarettes forms a considerable part of revenue.
This time last year, just before a tax hike on cigarettes, then Treasurer Chris Bowen stated that the last time the tax was raised, it lowered consumption by 11 per cent.
The excise now means that cigarette prices will go up 12.5% each year for four years (starting as of last year) and this plan equates to $5.3 billion of extra taxes.
But in the meantime the government gets to tax cigarettes, while touting the benefits of a tax which has been argued to deter potential smokers as well as benefit the community.
The high prices that users pay when purchasing cigarettes has even been likened to a ‘user pay’ system – a contribution towards a fund that they will eventually be drawing from later on in life if they happen to be one of the 50 smokers who die each day in Australia.
After all, you might ask, why should the community be required to financially support someone’s years of bad choices?
And if it happens to also be a little advantageous bit of revenue raising that can over expenses outside the Health Services sector, well, the government certainly isn’t complaining.
And they certainly don’t seem to be in a hurry to cut off this stream of income which would be one consequence of banning cigarettes.