Impact of State Cigarette Minimum Price Laws

Audience:

Staff from state and local tobacco control programs and non-government organizations.  Individuals with an interest in understanding more about non-tax pricing strategies.

Key Points:

Increasing the price of cigarettes is one of the most effective tobacco control policies. While cigarette excise tax increases are the most direct way for a state to increase cigarette prices, minimum price laws have been identified as a policy tool with the potential to serve as a secondary method by which states can raise cigarette prices.  These laws typically require a percentage markup be added to the wholesale and retail price of cigarettes, and may also prohibit tobacco companies from using discounts to lower cigarette prices. 

Using data published by CDC on the 25 states with minimum price laws and data from Nielsen Scan Track data on cigarette prices, the average price of cigarettes were calculated for states with and without minimum price laws, controlling for state and local excise tax.  The results show that states with minimum price laws do not have higher cigarette prices.  Average cigarette prices in convenience stores, drug stores, and grocery stores were higher in states without a minimum price law when compared to states with a minimum price law. 

Educational Experience:

A brief presentation will outline the background, study methods, and results and answer questions from participants.

Benefits:  

Participants will understand 1) Why cigarette prices are not higher in minimum-price states; 2) Enforcement issues related to minimum price laws, and 3) How these laws can be strengthened to increase cigarette prices.