Falling cigarette prices prompt health concern

Leading tobacco companies are set to lower the price of cigarette brands in Switzerland amid lower sales and tougher competition from discounters.

Health campaigners are concerned that lower prices will drive up tobacco consumption and are calling instead for cigarette prices to be increased.

Philip Morris, one of the three big tobacco names in Switzerland, said the price of a packet of cigarettes could fall by up to half a franc ($0.39).

Spokesman Marc Fritsch told Swiss public radio the company was reacting to tough competition from discounters, including German newcomer Aldi, which have begun offering no-name cigarettes for up to a quarter the price of brand names.

Another reason was the higher tax slapped on cigarettes in late 2004, which had added SFr0.50 to the cost of a pack.

“The tax increase has had an impact on consumers, who naturally want to smoke for less money,” Fritsch said.

Risk to youth

Philippe Vallat, the head of the national tobacco prevention programme within the Federal Health Office, said he was concerned at the development. He said low prices had until now never been used in Switzerland as a tool for marketing cigarettes.

“It is internationally well documented that consumption of cigarettes is directly linked to prices, and especially young people are very sensitive to price,” Vallat told swissinfo.

“We are afraid that the lowering of prices by the tobacco industry could lead to increased consumption, especially by the youth.”

Vallat said the health office expected the government to react to the move by announcing an increase in cigarette tax.

“What we expect at the health office is that the government increases the cigarette tax in order to make tobacco products less affordable for consumers and young people.”

The head of the tobacco prevention programme said recent experiences in France showed that a tax increase did lead to a reduction in consumption, especially among young people.

“A good tax policy by the government is one of the central elements of efficient tobacco prevention. We’d like the government to increase taxes as that’s a very effective and simple means of fighting tobacco consumption.”

Vallat said tobacco consumption in Switzerland was generally decreasing amid moves in the country to clamp down on passive smoking and as awareness of the health risks of smoking grew.

“In Switzerland opinions about smoking are changing,” he said.

Minimum price

Swiss parliamentarian Walter Donzé is also concerned that lower cigarette prices will lead to greater consumption. “The industry is reacting with lower prices to try to increase demand. I find this development dangerous,” Donzé told Swiss public radio.

The politician has submitted a proposal to the House of Representatives calling on the government to set a minimum price for a pack of cigarettes.

Vallat said the health office would also agree to a minimum price, but that a tax increase should take priority.

“A tax increase comes in first priority for us and then we would consider the implementation of a minimum price.”

swissinfo

Key facts

1.3 billion people are estimated to smoke worldwide.
There are around 2 million smokers in Switzerland.
The World Health Organization and the World Bank estimate that a 10% rise in the price of cigarettes would encourage around 42 million smokers worldwide to give up the habit.

In brief

Following the 50-centimes price rise in autumn 2004, a packet of cigarettes now costs between SFr5.70-SFr6 in Switzerland – as much as in neighbouring Italy and Austria.

There has since been a drop in the number of tourists buying cigarettes in Switzerland.

Revenue from the tobacco tax into the state coffers has fallen by an estimated SFr100-200 million.