Difference between recommended retail price and sales price for tobacco products in independent and convenience (small) retailers before and after the introduction of standardised tobacco packaging in the UK.

Abstract:

AIM:Recommended retail price (RRP) is a marketing strategy used by tobacco companies to maintain competitiveness, communicate product positioning and drive sales. We explored small retailer adherence to RRP before and after the introduction of the Standardised Packaging of Tobacco Products Regulations in the UK (fully implemented on 20 May 2017) which mandated standardised packaging of cigarettes and rolling tobacco, set minimum pack/pouch sizes and prohibited price-marking. METHOD:Monthly electronic point of sale data from 500 small retailers in England, Scotland and Wales were analysed. From May 2016 to October 2017, we monitored 20 of the best-selling fully branded tobacco products (15 factory-made cigarettes, 5 rolling tobacco) and their standardised equivalents. Adherence to RRP was measured as the average difference (%) between monthly RRPs and sales prices by pack type (fully branded vs standardised), price-marking on packaging and price segment. RESULTS:The average difference between RRP and sales price increased from +0.36% above RRP (SD=0.72) in May 2016, when only fully branded packs were sold, to +1.37% in October 2017 (SD=0.30), when standardised packs were mandatory. Increases above RRP for fully branded packs increased as they were phased out, with deviation greater for non-price-marked packs and premium products. DISCUSSION:Despite tobacco companies emphasising the importance of RRP, small retailers implemented small increases above RRP as standardised packaging was introduced. Consequently, any intended price changes by tobacco companies in response to the legislation (ie, to increase affordability or brand positioning) may be confounded by retailer behaviour, and such deviation may increase consumer price sensitivity.

journal_name

Tob Control

journal_title

Tobacco control

authors

Critchlow N,Stead M,Moodie C,Angus K,Eadie D,MacKintosh AM

doi

10.1136/tobaccocontrol-2018-054409

subject

Has Abstract

pub_date

2019-07-01 00:00:00

pages

449-456

issue

4

eissn

0964-4563

issn

1468-3318

pii

tobaccocontrol-2018-054409

journal_volume

28

pub_type

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