Center for Global Development’s Post

Imperial Brands PLC (LSE:IMB), the tobacco company, said it is on track to deliver a ramp-up in both interim and full-year profits after it hiked its prices. First-half operating profit is expected to grow by a low single-digit before the group moves into the second half which is predicted to be more heavily weighted. Management says it is confident in meeting full-year guidance, which targets improvements to net revenues and aims to deliver a step-up in adjusted operating profit growth. Combustible tobacco operations, which covers its cigarette brands like Golden Virginia and JPS, is said to have experienced declines in sales in the UK and Germany, albeit offset by jumps in Spain, the US and Australia. Imperial says second-half performance will be “underpinned by embedded tobacco pricing already taken in the first half”. Additionally, next-generation products (NGP), which are alternatives such as vapes... More at #Proactive #ProactiveInvestors http://ow.ly/6bJx105oVGn

💸 The Effect of Tax Increases on Tobacco Products: Shaping Consumer Choices and Industry Trends Governments around the world are leveraging tax increases on tobacco products as a key strategy to reduce smoking rates and improve public health. But how are these changes influencing consumer behavior and the tobacco industry? 📉 Impact on Consumers Decreased Consumption: Higher prices often deter smoking, particularly among younger demographics and low-income groups. Shift to Alternatives: Many consumers are exploring alternatives like nicotine pouches, vaping, or heated tobacco products as more affordable and less harmful options. Illicit Trade Growth: In some regions, increased taxes have led to a rise in black-market sales, as consumers seek cheaper, untaxed products. 🏭 Industry Response Product Diversification: Tobacco companies are investing in reduced-risk products to offset declining cigarette sales. Pricing Strategies: Brands are introducing tiered pricing or value packs to retain price-sensitive customers. Advocacy: Some companies are pushing back on tax hikes, citing concerns about illicit trade and economic impact. 🌍 Global Perspective Tax policies vary widely across countries, but one trend is clear: higher taxes drive innovation in the nicotine market and encourage consumers to move toward less harmful alternatives. This shift not only impacts public health but also redefines the future of the tobacco industry. What’s your perspective on tobacco taxation? Is it the right tool to drive meaningful change, or does it need to be balanced with other strategies? #TobaccoTax #ConsumerBehavior #PublicHealth #NicotineAlternatives #HarmReduction

A record 83% of smokers admitted to buying illicit tobacco — not subject to UK tax — compared to 71% in 2016. This ranges from lowest region (79% in Wales) to the highest region (92% in London). The results have been published by the Tobacco Manufacturers Association (TMA), from it latest Anti-Illicit Trade Survey, which questioned 12,000 UK-based smokers. https://hubs.li/Q02VJf4q0

Australia: The effect of tobacco tax increase on price-minimizing tobacco purchasing behaviours: A systematic review and meta-analysis

As temps continue to increase throughout the summer, so do tobacco tax rates in several states. Check out this article by Convenience Store News to learn more about the latest tobacco legislation that's happening across the United States right now. #tobacco #legislation #tobaccolegislation #regulation #compliance #updates

There is not a single redeeming quality for cigarettes/ tobacco. I read this on the front page of the Sunday Mail 5 January 2025, comments from QLD Health Minister Tim Nicholls about "cracking down" on dodgy tobacconists and black-market tobacco trade. To claim that Legal (taxed) tobacco is safer? (😂) than illegal (untaxed) tobacco is a joke. While the intent to curb illegal activity is commendable, this approach highlights a critical gap in understanding cause, effect, and the economic principle of price convergence. Not to mention what is actually illegal that you are claiming to stop. A fire bombing of a building, or someone smoking? Here’s the reality: The underground trade of tobacco thrives not because of a lack of enforcement, but because of extremely high taxes on legal tobacco products. These taxes create a massive price disparity that makes black-market alternatives not only viable but attractive to consumers. But this approach by Tim Nicholls MP shows a clear gap understanding social benefit. No one can say 'legal' tobacco is (had to say) safer than 'illegal' tobacco, yet business burning and people being threatened and hurt in a turf war, which is directly caused by the governments actions are hard to ignore. This issue is a textbook example of the price convergence principle at play. When the legal market becomes prohibitively expensive due to taxes, the illegal market steps in to fill the gap, offering a cheaper alternative. As the price of the legal product rises, the profit margin for illegal operators grows, incentivising their activity. It's a simple cause-and-effect relationship that’s been demonstrated across industries—whether it's alcohol during prohibition, pharmaceuticals, or even tech products, every time from government taxing policies. Before implementing harsher crackdowns, on small business, it’s worth asking: What is causing this market behaviour? Are policies unintentionally creating fertile ground for the very black markets they aim to eliminate? Without addressing the root cause—unsustainably high taxation—a crackdown only treats the claimed 'unsafe' products which are symptoms, not the disease. Putting the Tax Revenue ahead of the broader safety of the community. Instead of focusing solely on enforcement, policymakers need to consider solutions that balance public health goals with economic realities. Simply a strategy.... adjust tax structures to reduce price gaps, would be far more effective in achieving long-term outcomes. Tim Nicholls MP when you fail to understand cause and effect, you will create policies that will perpetuate the problem. Next issue is States don't control the Tobacco excise, but they do control sales licenses, so here we go, Queensland Government, get your dogs out to hunt small operators, making a living selling something that is legal. What are your thoughts?

Thanks to gains in the handmade premium cigar and next generation product market, Scandinavian Tobacco Group (STG) saw an increase in profits during the second quarter of 2024. Learn more about STG's business performance, including the impact of its recent acquisition of Mac Baren. https://lnkd.in/dGg3AH3j #financial #business #scandinaviantobaccogroup

This Briefing questions the recent government decision to halve the excise tax levied on heated tobacco products. This is the first time Aotearoa New Zealand has ever reduced the excise tax on a tobacco product so is unprecedented. The Briefing describes how tobacco companies had advocated for this change. And how reducing this tax went against Ministry of Health advice that there was no evidence to support heated tobacco products as smoking cessation tools. Associate Health Minister Casey Costello described the move as a “trial”. However, there is no evidence that this measure is a rigorous trial or part of a wider strategic approach. The authors comment that: "The Associate Health Minister needs to provide greater transparency in her decision making so that persistent concerns she is pursuing the tobacco industry’s agenda, rather than public health goals, can be dispelled." #TobaccoControl #SmokeFree #SmokeFreeGeneration

British American Tobacco (BAT), one of the largest players in the tobacco market worldwide, claims to have a powerful stake in both the traditional cigarette sector and the emerging alternative nicotine space. Known for brands like Lucky Strike and Dunhill, BAT faces growing scrutiny over health risks and the challenges tied to its core business, operations, and future prospects.   In February 2023, BAT projected a positive outlook but downplayed struggles with its premium cigarette brands, which are losing market share to cheaper alternatives. While the company reported steady sales, it allegedly masked deeper issues affecting the value of these premium brands, claiming certain products were performing "well" without addressing the long-term decline in cigarette demand.   The truth emerged in December 2023 when BAT announced a staggering £25 billion ($31.5 billion) loss on its cigarette brands due to economic challenges and a shift toward smokeless products. According to a report from the Wall Street Journal (WSJ), this loss is one of the largest write-offs in the industry, largely attributed to smokers opting for cheaper options and illegal disposable vapes. Additionally, a Reuters report indicated that BAT recognizes its U.S. tobacco brands may not hold much value in the future, highlighting the need to focus more on alternatives like vapes. On this news, BAT’s stock price plummeted by 8.88% (or $2.68 per share), leading to significant losses for investors and raising concerns about the company's financial stability. Pomerantz was appointed lead counsel in an investor suit against BAT, alleging that the company materially understated the risks to its premium American cigarette brands, rendering its statements about its business, operations, and prospects materially false and misleading.   #TobaccoIndustry #HealthRisks #CorporateAccountability #SecuritiesLitigation #ClassAction

The consequences of bans on products such as menthol cigarettes and flavored cigars demonstrate a higher concern for the convenience industry at large. Learn how such restrictions would facilitate a large illicit trade market if implemented in your area, and how such rulings could impact your business in the near future. #trademarket #regulation #tobacco #advocacy https://lnkd.in/ex2SqpZh