This section provides everything you need to effectively communicate how the industry views tobacco taxes as a direct threat to their profitability and actively works against its adoption worldwide.
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One of the Tobacco Industry’s biggest priorities is to keep excise taxes low and tobacco prices affordable in order to maintain and drive-up sales.
If tobacco taxes do not reduce consumption, the industry would not fight them tooth and nail as it does.
Tobacco companies claim to be an economic driver of a countries’ prosperity when the opposite is true. Tobacco use imposes enormous financial costs on governments and compromises prosperity.
Tobacco companies argue that tax increases also increase illicit trade, but tobacco companies often increase prices when higher taxes enter into effect to ensure they maintain profits as consumption declines.
Tobacco companies fight strong tobacco tax proposals because they threaten product sales and, therefore, company profits.
The tobacco industry promotes complicated tax systems because they ensure that affordable tobacco products can remain on the market.
Tobacco companies fight hardest against meaningful tobacco tax increases because they know increasing the price of tobacco reduces tobacco use.
The TI uses front groups to influence high level policy makers. The front groups make use of industry funded research as a means of making their case on behalf of the TI.
The tobacco industry uses third parties to promote industry claims about the negative impact of increasing tobacco taxes. The content of these messages references unsound tobacco industry funded research, which promotes misinformation among policy makers and the public.
Price discrimination is selling the same product at different prices to different customers. The tobacco industry engages in price discrimination by using various price-related promotions to lower the price or otherwise add value to its products for a particular category of consumers [for example: by using coupons, samples, gifts with purchase, or by differential pricing by geographic location or store type (e.g., retailer rebates)].
Tobacco companies may lower prices of some or all of their products in response to a tax increase. Reducing the base price of tobacco products may reduce the tobacco industry’s profit built into ex-factory prices (i.e., the base price or price of products as they leave the factory); however it may increase the industry’s overall profit by saving on tax payment and by increasing sales if the price and tax reduction is passed on to the consumer in the form of reduced prices.