The Case of Romanian Cigarette Market

even though the author of this article talks in particular about excise taxes, this initiative will eventually affect the buyer because they will have to pay more for the this products they are consuming. In class, we have a discussion on sales taxes and the incidence of tax. Even though cigarette distributers are required by law to pay this tax, the consumers of cigarettes are going to end up paying more for the increase of taxes. Therefore, this article is also related to the legal and economic incidence of a

This media report outlines the publics impulsive buying of cigarettes upon the government’s mention of the very rapid increase in taxes, thus resulting in an

The prohibition of tobacco has been trending in foreign nations such as Finland, Norway and France. To conduct similar constraints is the intention of the government of India. Endangerment and possible victims of hazards are the concerns of those who are in favor of banning tobacco as well as other precarious commodities such as handguns and narcotics in India. Millions of deaths around the world have been the aftereffect of tobacco and cigarette smoking since the 90’s. Predictions of an increase of death toll would occur in the latter years to come. Utilization of tobacco among the youth is the product of propagandas’ enticements. Consequently, an increase in medical expenses such as hospital bills and health care expenditures would become the repercussion of such consumption. Additionally, even supposing that the occupation of 26 million people is the liability of tobacco industries, a boycott of tobacco and job turnovers would not create an adverse impact on the economy of India. Investments in other stocks would enhance the Indian economy. Finally, a decline of tobacco consumption would become fruitful if there is a proper implementation of banning tobacco endorsements.

Department of Health & Human Services 2000 report by the Surgeon General. Increasing the price of a pack of cigarettes by ten percent has been shown to reduce smoking rates by an average of 4.8 percent (a mean price elasticity of -0.48) as more smokers quit and fewer potential smokers start. This effect is greatest among youth and low income consumers, who are particularly sensitive to price. However, inelastic goods, such as tobacco, have fewer substitutes and a price change will not have a significant influence on the quantity demanded. In the long run, time may be the greater influece as it moves the elasticity of cigarettes to one that is more elastic, if the smoker finds he can no longer afford the $2 per pack and eventually begins to kick the

- The Increase of the Unit Price for Tobacco Product: this recommendation is based on an intervention that consisted in the increase of tobacco product price by 20%. With that increase, the overall consumption of products derived from tobacco was decreased by 10.4%, the use among adult was reduced by 3.6%, and finally it decreased the initiation of tobacco use by young people by 8.6%.Economic evidences also suggested that the increase helped save money in healthcare cost ranging from -$0.14 to $90.02 per person in a year. In the meantime, some studies showed an increase in healthcare cost because people were living longer than expected after they quit smoking. (Community Preventative Services Task Force)

There are many cities who have implemented bans on cigarettes, but China overall is still the leading consumer of cigarettes in the world. A countrywide tax on cigarettes has been proposed to their Ministry of Finance, and Ministry of Economics and Trade, but a decision has yet to be made. Tobacco production provides substantial revenue to the government and a tax increase will have a significant effect on the central government and reduction of consumption of cigarettes. According to a study done by the group proposing the tax, “a 25% tax increase will have an overall monetary benefit that far exceeds the negative impact on the cigarette industry and tobacco farmers. In financial terms alone, not counting the number of lives saved and medical care cost savings, the gain of the central government tax revenue (24.58 billion Yuan) twice exceeds the loss of tobacco farmers’ earnings, tobacco industry workers’ earning and loss of industry and local government revenue (11.74 billion Yuan)” (Hu TW 107). There many components to this calculation, but some factors included the reduction of cigarette consumption, the number of lives saved, savings in medical care costs, gains in productivity due to avoidance of premature death, industry revenue lost, lost jobs in cigarette industry, loss of tobacco income, and loss of local government

With the looming possibility of the implementation of plain packaging on cigarette cases, the lobbyist involved uses certain facts to shed light on the seemingly hidden implications of the plain packaging policy. The main concern of the lobbyist and the advantage point lies within the state of unawareness the majority of the population is left in. The lobbyist essentially claims that the plain packaging policy has no proof of being an effective way of diminishing the smoking population. Though the lobbyist asserts that it is invalid, this research essay will introduce compelling evidence and experimental data that suggests the notion behind the plain packaging policy is actually an efficient method for minimizing the popularity of smoking. This paper will also include opposing point of views that argue otherwise and the issue with their allegations. Before analyzing academic sources that convey the effectiveness of plain packaging, it is crucial to have an understanding of what plain packaging is and how it works.

Cigarettes is produced to satisfy the growing population of smokers. Smokers are hooked to a substance called nicotine that is in a cigarette along with other harmful substances. Cigarette is a great product to be selling for the firm. As the customers(smokers) are addicted to nicotine , these firms can rely on them for continuous demand and they can easily increase supply. Therefore, the firms can easily monopoly the market and fix their own price.

However our concern here is not only about the cigarette as a product but with the ethics of cigarettes as well, that affect the social process of marketing. This is because marketing process makes things worse and is also considered as unethical, and as a result has a significant negative impact on the societal welfare. Multinational tobacco companies apply sophisticated strategies ( such as putting flavor in the cigarettes and placing cigarettes in the shops near the sweets to make them more appealing) and invest huge amounts of money for marketing, in order to establish brand familiarity and future loyalty among young peoplem, to secure profits in the long run. 'The tobacco epidemic is a man-made international health crisis, created and sustained by multinational tobacco corporations.' (Yach, Brinchmann, Bellet page 2).

A person, who smokes on a regular basis, spends a majority of his money on buying cigarettes. For instance the average pack of cigarettes costs four dollars. In a year’s time, that would cost a person an average of 1500 dollars a year. And if the person is hospitalized due to cigarette use, his medical expenses will rise so will his insurance rates. While the person is in the hospital there are no income coming in. They are only spending money. In U.S.A several attempts were made to curtail illegal internet tobacco sales but it was with limited success. (Ribisl KM, Williams RS, Gizilice Z, Herring AH, 2011) In most of the cases the internet vendors offer tax free cigarettes making them cheaper than those sold at stores. So, in this ways, though selling cigarettes are banned the buyers are getting it through internet.

The aim of this essay is to illustrate how the markets will react when the government step in. This essay shall focus on the tobacco market in the United Kingdom through an organisation known as Phillip Morris International Limited. The first section of this essay provides the background and characteristics of this organisation in the United Kingdom division. This is followed by the justification of the applicable market structure. This essay highlights some of the reasons for government intervention and provides a real-life example of such government intervention in the market. The impacts to the various parties are analysed accordingly.

One of the most prevalent topics in our twenty-first century world is that of health. Now more than ever, a healthy lifestyle, whether that be through diet, exercise, or mental strength, is being promoted, especially by the younger generation. But, several unhealthy habits are left to be. The use of cigarettes is among these unhealthy habits. Despite the well-known adverse effects of cigarette smoke, it continuous to be a norm for all people alike. The possession and purchase of tobacco products should be limited to citizens twenty-one years and older because of the widespread deaths caused by tobacco products, the unfair manipulation of youths, and the ill effects that those who choose not to partake are still subject to, due to others’ choices.

Given the oligopolistic nature of the US tobacco product industry, the remaining firms are forced to compete through aggressive marketing and advertising strategies that are subsidized by their high economic profits. A 1976 report for Phillip Morris (now Altria) described the nature of tobacco product pricing as “some sparring among potential price leaders, after which the rest of the industry accepts the resulting price structure” (IARC, 2014). This report offered that a “relative absence of price competition in the market” allowed prices to offer high profits which were then used to support other marketing and advertising activities, which is where cigarette companies were more likely to compete aggressively with one another (IARC, 2014). Tobacco companies have consistently raised prices on their products beyond the various tax increases put on at the state and federal level, passing on this additional cost to the customer (USDA Economic Research Service, 2007). Moreover, the tobacco companies have also acted opportunistically as a group by earning more profits on a per unit basis after the introduction of tobacco taxes. This price increase strategy could be recommended if consumers don’t associate the price increases with profit-seeking from the tobacco companies, but instead associate it with the government (IARC, 2014).

Background Cigarette Litigation - At the heart of the paradigm of societal law, tobacco and tobacco related products remain a controversial issue. Globally, about 33% of adults use some type of tobacco daily, even though it likely has a strong effect on the deaths of over 5 million per year. In developing countries, largely due to stricter laws and bans on advertising, smoking has leveled off however, in developing countries the number of active smokers has risen each year over the past two decades ("Tobacco Facts," n.d.). The industry itself is very competitive, yet highly profitable and able to divert huge amounts of revenue to defend any potential litigation. The tobacco industry is dominated by a few large firms; price competition may also be restrained, either by outright collusion, or more commonly through "parallelism" of pricing decisions (See: Mackay, 2006; "Tobacco The Industry Perspective, 2009). The intense advertising efforts of the tobacco industry lead to strong brand awareness and subsequently to a highly differentiated product that can demand a higher price than would be the case if the products were indistinguishable (Glantz, 1998). Additionally the tobacco industry's revenues are highly consistent and stable, generally unaffected from booms or busts in the economy.

The proposed paper will investigate the relevancy of excise taxes on cigarette consumption, the act of cigarette consumption, and the most prominent method used to lower it by the U.S. government. This method called an excise tax, or informally a sin tax, is a tax issued by the government to be built into the price of a good or service to dissuade consumption. Through analyzing the data and experiments of top contributors to this subject, one will perceive how this method impacts cigarette consumption, if at all, and