Friday, 13 September 2013

Tobacco taxes and 'excessive profits'

I was on the Irish radio station Today FM yesterday debating with a spokeswoman from the Irish Cancer Society. It appears that the Irish anti-smoking lobby has picked up on an idea that Anna Gilmore came up with three years ago. I wrote about it at the time in a post entitled You Can't Rip Smokers Off, That's Our Job. The gist of Gimore's argument is that the tobacco industry makes 'excessive profits' and therefore (?!) the government should tax cigarettes more.

The Irish government actually makes fourteen times as much money from cigarettes in Ireland than the tobacco industry does, so if we're going to accuse anyone of excessive profiteering I would suggest that the industry comes a very distant second after their venal politicians.

If you want to hear the discussion, it's here from 18 minutes 25 seconds.


Jean Granville said...

This claim that 50% of smokers die from smoking gets irritating. She used it when she had no argument about the cost issue.

Mark Wadsworth said...


Tobacco companies do not make super profits, once you deduct tax.

We know this because the price of fags varies wildly around the world and even within Europe, 90% of the difference depends on the level of taxes on fags (which also varies wildly from country to country).

If the selling price were independent of the tax, then fags would cost the same everywhere.

Jonathan Bagley said...

Oddly, today's ASH UK news has a link to a newspaper article reporting that the high Irish tobacco tax is leaving smokers no money to buy food.

Jonathan Bagley said...

High taxes make it easier for tobacco companies to increase prices. Same with petrol. Suppose cigs sell for £2 and tax is £6. Gov announces duty increase of 50p. Add another 10p and nobody notices, but it's actually a price increase of 5%.

Junican said...

I've just listened to the broadcast.
You did a good job, Chris.
It amazes me that these people get away with their astonishing claims. I doubt that a single claim that she made is proven fact. But did we notice that her claims were all based upon HER interpretation of what certain 'authorities' said? I am sure that you know that it was Doll who first claimed that 'smoking kills half of smokers'. I don't know why it never occurs to anyone that, according to Doll's charts, smoking kills ALL smokers since they ALL die, on average, before non-smokers. But, then, little actual FACT is involved in these calculations. What they mean is that a person who dies is a little more likely to be a smoker that an equivalently age person who is a non-smoker. Again, from Doll's doctors study, light smokers (1 - 14 a day) are hardly different from non-smokers.
It is these wild exaggerations which need to be exposed, and if she can quote 'higher authorities', so can you!