What is the cost of a cigarette? Reply

There are (at least) two ways to consider the cost of a cigarette. In health terms the answer is straightforward – 11 minutes. That’s the average amount of life lost from smoking one cigarette.

Some simple arithmetic indicates how the health impact quickly adds up. For every 100 packs of twenty cigarettes a shop sells each day, it removes 15 days of life from the community it serves.*

But smoking is also about money. So in purely financial terms, what is the actual price of a cigarette?

The tobacco companies themselves provide initial figures for this. They report “the recommended retail price of a typical pack of 20 cigarettes in the Most Popular Price Category” to be £8.47. This gives a crude estimate of 42 pence per cigarette (847 divided by 20). But let’s take a little more care over this.

Not everyone smokes manufactured sticks and the cheaper, roll-you-own market will drive down the average cost. The Office of National Statistics estimate a 65/35 split between cigarette sticks and roll-your-own across Britain. We don’t have an “official” industry estimate for roll-your-own prices, but needs must and a rough and ready reckoner gives us £8.74 for 25g of Amber Leaf (being the cheapest price for north Edinburgh on supermarket comparison site www.mysupermarket.co.uk/)

With 25g of rolling tobacco equating to around 40 cigarettes, that gives a price of 22p each (874 divided by 40).

Then there is the illicit market, for which we should use figures from Her Majesty’s Revenue and Customs. These indicate 10% of cigarette sticks are illicit, along with 39% of roll-your-own tobacco. Clearly there are no exact figures on the costs of illicit tobacco, but around half the price of legal products is a common estimate.

Crunching the numbers (and, in the interests of transparency, the spreadsheet is included as the featured image for this blog) gives us an overall estimate of 32 pence per cigarette. That’s £6.40 for a pack of twenty. Or £2,300 a year for a 20 a day smoker.

The economic costs of maintaining a tobacco addiction are immense. A family with household income of £18,400 a year, and two parents each smoking 20 a day, will spend one quarter of their whole income on tobacco.

Turning a problem into an opportunity, these figures indicate that reducing smoking rates is a highly efficient anti-poverty measure. We calculate elsewhere that reducing the smoking rate in the most deprived areas by just 1% (from 34% to 33%) would leave around £12.5 million extra in the pockets of those communities every year. There are few interventions which can deliver that level of benefit – with  potentially 34 of these 1% changes available.

Some will say that reducing the tax on tobacco would also reduce the costs to poorer communities. But we know that tobacco consumption is strongly affected by price so reducing the cost of tobacco would be at the expense of increasing consumption, and hence the associated harm. These arguments have been considered in greater detail in discussions on the impact of cheap alcohol on communities.

And it would be remiss to cover this subject without noting research that half of the recent increases in tobacco price stem not from Treasury tax policies but from the tobacco industry’s own price hikes.

The sooner we put reducing smoking at the heart of the anti-poverty agenda the better.

* From the simple calculation: Life lost is 11 minutes times 20 cigarettes times 100 packs = 22,000 minutes. In days this is 22000 divided by (60*24) = 15.28

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