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$15 Minimum Price Key Points ● Raising the price of tobacco products is one of the most effective strategies for reducing initiation of tobacco use, decreasing tobacco consumption, and increasing cessation of tobacco use. ● However, the tobacco industry knows that cheap prices help to lure new users and keep current users hooked, so they spend billions of dollars each year on price discounts and coupons to reduce prices.1 ● Price discounts are the tobacco industry’s single largest marketing expenditure – typically 70–80% of their spending on marketing and advertising.2 ● Although increasing excise taxes has long been the primary way to raise tobacco prices, many local jurisdictions do not have the legal authority to enact additional tobacco taxes, and the deep discounts and coupons offered by tobacco companies can diminish the impact of such taxes.3 ● Additional pricing policies can complement excise tax increases and counteract pernicious industry practices that keep prices low.4 ● The price of cigarettes is significantly related to their consumption: when cigarette prices rise, people tend to smoke less or quit. The availability of cheap tobacco products increases rates of tobacco use, particularly among young adults, who tend to be price-sensitive. 5 ● Research suggests that for every 10% increase in the price of cigarettes, adult smoking decreases by 3–5% and youth smoking decreases by 6–7%;6 some studies find even greater reductions. ● Studies show that when tobacco companies lower tobacco product prices in the face of rising taxes, more people tend to purchase cigarettes, especially the young and new users. 7 7 According to a 1994 U.S. Surgeon General's report, the use of price promotions makes cigarettes appear more affordable to smokers with limited economic resources, including children. Evidence suggests that price promotions also encourage new smokers to smoke more often, thereby entrenching their habit. U.S. DEP’T OF HEALTH & HUMAN SERVICES, PREVENTING TOBACCO USE AMONG YOUNG PEOPLE: A REPORT OF THE SURGEON GENERAL (1994), available at http://www.cdc.gov/tobacco/data_statistics/sgr/1994/index.htm. 6 Centers for Disease Control and Prevention, Office of Policy, Performance, and Evaluation 5 Bader P, Boisclair D, Ferrence R. Effects of tobacco taxation and pricing on smoking behavior in high risk populations: a knowledge synthesis. Int J Environ Res Public Health. 2011 Nov;8(11):4118-39. doi: 10.3390/ijerph8114118. Epub 2011 Oct 26. PMID: 22163198; PMCID: PMC3228562. 4 Ibid. 3 POINT-OF-SALE TOBACCO PRICING POLICIES Equity, Public Health, and Legal Considerations; Change Lab Solutions. 2 Federal Trade Commission Cigarette Report for 2021. Issued 2023. 1 Federal Trade Commission Cigarette Report for 2016. www.ftc.gov/system/files/documents/reports/federal-trade-commission-cigarette-report-2016-federaltrade-commissi on-smokeless-tobacco-report/ftc_cigarette_report_for_2016_0.pdf. Published 2018; Federal Trade Commission Smokeless Tobacco Report for 2016. www.ftc.gov/system/files/documents/reports/federal-trade-commission-cigarette-report-2016-federal-trade-commissi on-smokeless-tobaccoreport/ftc_smokeless_tobacco_report_for_2016_0.pdf. Published 2018. 40