Cigarettes dangerously cheap in developing world, UN agency study warns

Calling for increased taxation on tobacco products, the United Nations World Health Organization (WHO) released a new study today that reveals that low tobacco prices in the developing world could add to already high levels of cigarette-related death and disease.

In contrast to the situation in industrialized nations, tobacco products in developing countries are cheaper now than they were a decade ago - sometimes even cheaper than bread or rice - according to the WHO study, which examined tobacco price trends between 1990 and 2000 in over 80 countries.

In spite of overwhelming support for increases in tobacco taxes from past studies conducted by the WHO, the World Bank, the International Monetary Fund and leading economists, the study reveals that the price of tobacco products has not kept pace with inflation. Meanwhile, over 70 per cent of the 8.4 million tobacco deaths projected to occur in 2020 will occur in the developing world, WHO warns.

"Increasing the price of tobacco products remains one of the most effective methods of curbing the consumption of tobacco products and thereby reducing the global deaths caused by tobacco," states Dr. Derek Yach, WHO's Executive Director of Noncommunicable Diseases and Mental Health.

He adds that higher prices help people avoid tobacco use and therefore addiction. They can encourage smokers to consume less tobacco or even persuade them to quit, and prevent ex-users from starting again. Governments receive more revenue from increased taxation. Dr. Yach describes it as "a win-win situation."

The WHO study shows there is scope to increase tobacco taxes in developing countries. It cites World Bank analysis that estimates a price increase of 10 per cent can reduce demand for tobacco products by about 4 per cent in high-income countries and by about 8 per cent in low-and middle-income countries. Tax increases that would raise the real price of cigarettes by 10 per cent worldwide would cause about 42 million smokers to quit and prevent a minimum of 10 million tobacco-related deaths.

The tobacco industry realizes the implications higher taxes would have on their sales volume, according to WHO. It cites secret industry documents obtained in US litigation, from Philip Morris and British American Tobacco, which express the industry’s concerns: "Of all the concerns, there is one – taxation – that alarms us the most. While marketing restrictions and public and passive smoking do depress volume, in our experience taxation depresses it much more severely," reveals one Philip Morris International document.

It is therefore not surprising, WHO notes, that the tobacco industry vehemently opposes increases in tobacco taxes and does everything it can to prevent governments from increasing taxes. WHO calls on governments to resist industry pressure and increase taxation – along with other measures – that will help save lives.