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Tobacco companies use loopholes in legislation to influence cigarette sales: new research

February 26, 2020

New Cancer Council research has revealed how tobacco companies influence cigarette sales through offering incentives and benefits to retailers like price discounts, cash payments, prizes and gifts such as event tickets, gift cards, coupons.

The survey of 800 current tobacco retailers found that a third reported being offered at least one benefit from a tobacco company for doing something in return. Over 40% of retailers reported being provided with a tobacco cabinet and 38% reported having a price list supplied by a tobacco company.

When asked what benefits were provided by tobacco companies, price discounts were most frequently reported, followed by rebates and gifts.

Lead author and Cancer Council NSW Tobacco Control Policy Lead, Christina Watts says, “The tobacco industry is exploiting gaps in Australian tobacco advertising, promotion and sponsorship legislation, which undermines public health measures put in place to protect people.

“Whilst overt tobacco advertising was banned nationally on TV since the late 1970s, in print since 1990 and outdoors including at most sporting events since 1993, tobacco companies have continued tobacco marketing activities in retail outlets.”

Retailers also reported offers of prizes and incentives for increasing sales or demonstrating product knowledge. In return, retailers reported giving companies benefits such as prominence on the price list and/or in the tobacco cabinet and/or influence over the product range and stock levels. One retailer described receiving a $1000 bar tab allowance from a tobacco company to be spent on a staff party at a chosen venue that also sells cigarettes.

“Whilst this type of business-to-business marketing in the retail sector is often used by companies to enhance product sales, this type of marketing is unacceptable in the sale of tobacco, given the significant health costs associated with smoking. The retail environment remains a key avenue of tobacco marketing and communication to consumers and needs better regulation," Ms Watts continues.

Megan Varlow, Director, Cancer Control Policy, Cancer Council Australia, says the new research comes as the Australian Government is looking to further reduce the harms of smoking, and is consulting at an unprecedented level to find evidence-based policy options.  

“The federal Minister for Health, Greg Hunt, has committed to reducing smoking rates to below 10% by 2025 and is leading a landmark national preventive health strategy. His Department is undertaking a thematic review of tobacco control legislation in Australia to help ensure they are effective and up to date. Publication of this new research is therefore timely,” Ms Varlow says.

“Despite smoking rates halving over the past 25 years, the tobacco industry continues to undermine public health policies – increasingly through retailer incentives. For example, the most effective measure to reduce smoking prevalence has been pricing, so it’s no surprise that price discounting is the most frequently reported benefit rewarded by the tobacco industry,” Ms Watts concludes.

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