Ofsmoke. Ofbollocks

Study calls for tobacco profits cap

Hmm. Sounds to me like someone wants to make tobacco more affordable for smokers. But that can't be right, can it?

An extra £500 million a year could be raised in tobacco tax if an independent regulatory agency to cap cigarette manufacturers' profits was set up, academics have said.
The creation of an 'Ofsmoke' agency to regulate the industry - similar to those in force for utility companies - would increase tax revenue and protect public health.

 How is this then? Cap the profits and still raise extra tax? I'm intrigued, please tell me more.

The University of Bath study said the agency would have the potential to increase UK annual tobacco tax revenue by approximately £500 million a year for HM Treasury.
The money would fund, twice over, UK wide anti-tobacco smuggling measures and smoking cessation services in England. Co-authors of the study Dr Robert Branston and Professor Anna Gilmore said regulation would set a maximum price that cigarette companies could charge for their product.

I understand that the tax leeches in the Tobacco Control Industry want to maximise their own profits but I still don't see how capping tobacco manufacturers profits will help do this. Are they suggesting the price of a packet of fags goes up but the Tobacco Companies don't get any extra profit, all of it going to the treasury, and hence the Tobacco Control Industry as tax?


They said that under their plan the retail mark-up would not be affected and neither would the price that consumers pay in shops.

Curiouser and curiouser.

Instead a slice of the profits currently accrued by cigarette manufacturers would be transferred to HM Treasury through increased tax.

I get it!

The Tobacco Control Industry needs money.
That money comes in the form of cigarette taxes.
When you increase tax on cigarettes, some people quit smoking, therefore not paying the tax.
If tax could be increased on fags but the manufacturers could be banned from increasing prices, more tax would go to tobacco control while ensuring that everyone who currently smokes continues to do so.

It's a win-win situation for the Tobacco Control Industry. They get more money to feather their own nests and nobody quits smoking, so the taxes keep coming in.

*moment of clarity* It's not about health. It never was.


Smoking Scot said...

Seems not that far from Stanton and his idea in California, or the WHO and their idea of a "Global Tobacco Tax".

Perhaps the study authors have overlooked corporation tax and shareholders dividend tax.

But the greatest overlook they make is the assumption that the big two (three if you include Japan Tobacco, who now own Gallagher) will hang around and let it happen.

No problem for them to relocate their Head Offices to Macedonia.

However the graph at Belinda's place very graphically illustrates the staggering cost of running TCI and their pathetic results.

Anonymous said...


Bucko The Moose said...

Smoking Scot - The tobacco companies do seem pretty good at hanging around and letting tobacco control happen.
I think the should follow a suggestion that I heard from Leg Iron - Pack up, lock stock and barrel and move out of the country in a weekend with no warning. The government would be begging them to come back.

Do you have a link to this graph?

Bucko The Moose said...

Anon - Well put

Smoking Scot said...

It's still on the front page of her blog.

That's F2C Scotland.

Bucko The Moose said...

Oh right, thanks