Big tobacco industry and the French government's approach to a major health issue:

Is the French government efficiently addressing the tobacco smoking habit?

During his recent election campaign, Emmanuel Macron denounced a bundle of issues in France, in an attempt to increase his popularity and appeal new voters. Reducing tobacco consumption in France is one such promise he made if he were elected, for it has been stagnating over the past two presidential terms in spite of successive rises in cigarette prices, and still causes 73,000 deaths per year.

Government awareness and the evolution of tobacco consumption in France

Legislation

The French love affair with cigarettes has cooled since its post-war heyday, thanks to a raft of measures that have been put in place to curb this sanitary and social issue. Firstly, the Veil act in July 9^th 1976 introduced awareness at political and governmental levels, by prohibiting tobacco consumption in some public spaces and adding the term “tobacco abuse is dangerous for health” on the packages, at least 11 years after the Federal Cigarette Labelling and Advertising Act (1965) was introduced in the USA. Then in January 10^th 1991 the famous Évin Act really signalled a dramatic turn in the evolution of tobacco consumption (and also alcohol), it prohibited the sale to minors as well as advertisement of such products, encouraged increase in prices, and introduced specific areas in order to separate smokers from non-smokers. Finally, on November 15^th 2005 the law was amended to strictly prohibit smoking in public spaces.

Price regulation through taxes

Jacques Chirac, the fifth president elected, officially declared the “war on tobacco” in 2002 and drove a range of drastic rises in taxes on cigarettes between 2002 and 2004: +€2.40 on the best-selling 20 cigarette pack over this short period, whereas afterward, it has only increased by 60 cents until now. Nevertheless, this resulted in a significant drop in tobacco sales. (E.g. Chart n°1).

Chart 1 - Evolution of tobacco and cigarettes sales

Source: DGDDI (French customs administration)

Tobacco consumption is a reflection of the social inequalities in France

On the one hand, the government seem to have succeeded in its mission by increasing taxes, and thus prices. Moreover, the authorities emphasised consumer awareness-raising campaigns and information measures, which led many daily consumers to find enough motivation and incentives to quit smoking. On the other hand, it appears that such a trend hasn’t been followed the same in every segment of society, in the overall tobacco consumption has indeed been declining over the last two decades, but the poorest and less educated part of the population has seen a substantial increase in its fraction of daily consumers (e.g. chart n°2).

Chart 2 - Evolution of daily tobacco consumers in France depending on education level and activity status

Source: Santé publique France

In theory, one might think that higher prices would have further discouraged those who can’t afford it, and yet instead the opposite has proven true. According to the findings of several psychologists, many processes are at work, such as the use of cigarettes to reduce stress, difficulties to project oneself in the future, mistrust towards government and its policies, increased risk of becoming dependant on an addictive substance, or even smoking being a community standard.

Furthermore, scientists from King’s College London and the University of Bath[i] carried out a study and found that, over the last decade in the UK, big tobacco industry has been manipulating cigarette prices by subsidising the cheaper products in order to keep the habit affordable, and to thwart taxes. The same strategy might have been applied in France, so that the cheapest brands still remain affordable, especially for “roll-your-own” tobacco.

As a result, the estimated prevalence of daily tobacco use among the lowest income groups grew 2.3% last year, reaching 37.5%, while it has declined from 23.5% to 20.9% for the highest income groups.

The government policies are ambivalent

By steadily yet slowly raising taxation on tobacco, the government is actually playing an ambivalent game. Smokers, far from being deterred by such a gradual change get used to it, and even make a major contribution to the public purse. According to a French independent analyst firm, Microeconomix, the tax yield on tobacco including VAT reached €14 billion, and the government has saved about €6.6 billion on unpaid retirement pensions, whereas the healthcare expenditure linked to tobacco amounted to €16.3 billion, plus €3.3 billion for uncollected taxes due to consumers’ deaths. Subsequently, the government net profit came to a billion euros in 2013.

Does the current French president, Emmanuel Macron, want to trigger the end of Big Tobacco?

Once elected, Emmanuel Macron and his first Minister Edouard Philippe soon announced a plan to raise tobacco prices to €10 by the end of 2020. Enough to make a grown man and his wallet weep. Nevertheless, the timetable is designed to steadily raise taxes, even if the first increase might reach €1, followed by a €0.50 increase on every semester. Might that be the end of Big Tobacco? Or would it lead to a boom in smuggling?

V.H.

---

[i] http://www.bath.ac.uk/health/research/tobacco-control/