Cheaper tobacco sparks outrage

Outraged anti-smoking organisations are worried cigarette price cuts by tobacco companies will make smoking more affordable and lure former smokers back to the habit.

A Central Otago retailer yesterday confirmed both British American Tobacco New Zealand and Imperial Tobacco have embarked on what appears to be a price war by dropping the cost of several brands.

The retailer said a British American Tobacco representative told him prices were being cut some brands by as much as $1.10 a packet to make smoking more affordable in the current economic situation.

Attempts to obtain comment from the two tobacco giants were unsuccessful yesterday.

Action on Smoking and Health director Ben Youdan said the lobby group was disgusted by the move, which set a "dangerous precedent".

"It's well documented that increasing the price of cigarettes was one of the best things you can do in terms of reducing use and therefore improving health."

Even reducing prices by 50c would have an "immediate and detrimental" effect on the health of New Zealanders by making smoking more affordable and potentially enticing younger smokers.

"It's the cheapest cigarettes which are getting even cheaper. They're not taking premium brands and making them cheaper," Mr Youdan said.

"They're taking brands that are smoked by those on the lowest incomes and by kids and making them more affordable."

He believes that a loophole in the Smoke-free Environments Act was being exploited by the tobacco companies.

ASH has laid a complaint with the Health Ministry regarding the reductions.

Health Ministry tobacco control senior policy analyst Brendon Baker said the ministry was concerned that cheaper tobacco products had become available and was seeking more information to determine whether the pricing structures broke the law.

"Price plays a very important role in reducing tobacco use, particularly among young people who are the most price-sensitive group in the population. The higher the price, the less people smoke," Mr Baker said

Smokefree Coalition director Mark Peck said he was concerned lower prices would entice ex-smokers back into the habit and had contacted Associate Health Minister Tariana Turia to highlight the organisation's concerns.

"If they get away with it, then it makes a nonsense of price being a way of driving down smoking rates," Mr Peck said.

"If there's a loophole and I imagine the tobacco industry lawyers have worked fairly hard on this, then we've asked the minister to have a look at that and see if we can close that loophole fairly smartly."

Higher prices discouraged young people from starting to smoke because they realised they could buy other things, he said.