Wednesday 3 September 2014

New Australian tobacco sales figures published

The Australian Bureau of Statistics has today published tobacco sales figures for the second quarter of 2014 (see table 8 for the data and see here for the background). After the decline in sales that followed the December 2013 tax hike, sales have risen by 1.8 per cent. Perhaps the most plausible reason for the increase is that smokers stockpiled cigarettes prior to the tax rise (which they have now consumed), as well as failed New Year's resolutions to quit smoking.

This is the picture over the last five and half years:

There is not much to say about the recent rise in sales, except that it is the third quarterly increase since plain packaging was introduced in December 2012. Contrast that with the two year period before plain packaging came into force when sales only rose once.

The bigger picture is clear for those who have eyes to see. Firstly, tax rises clearly have some effect on consumption, as might be expected (although these figures do not tell us anything about illicit tobacco sales or smoking prevalence in general). Secondly, plain packaging has been an irrelevance, at best. Tobacco sales were higher by the end of 2013 than they had been at the end of 2012. Only the tax hike of December 2013 saved the anti-smokers' blushes, at least in the eyes of the more gullible sections of the media.

Another 12.5 per cent tax hike has just been introduced. At this rate, they will have to increase the tax rate every quarter.

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