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Cigarettes Could Reach $80 Per Pack In New Zealand

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As part of an effort to make New Zealand a smoke-free nation by the year 2025, officials at the Ministry of Health have commissioned an economics forecasting firm to model a variety of pricing scenarios showing how increasing the cost of cigarettes would effect smoking prevalence, 3 News reports.

The modeling found that in order to achieve a population-wide smoking prevalence of 5 percent or less, New Zealand would have to institute a pricing plan that would the increase the cost of cigarettes to $100 NZD (about $80 USD) per pack by 2020 with price tags "increasing exponentially after that."

Health officials said that even if the nation were to increase the price of cigarettes to around $40 NZD ($32 USD) per pack by the year 2025, it would fail to achieve the desired smoking prevalence.

Those pricing options were outlined in a 17-page report titled "Smoke-free New Zealand 2025: next steps in tobacco control," which 3 News obtained from the Ministry of Health under the nation's Official Information Act.

The report was part of a preliminary investigation into pricing models for decreasing smoking prevalence and does not reflect government policy. But the report did offer a number of suggestions for stubbing out smoking that may raise eyebrows.

"While year-on [cigarette pack price] increases of 30% are probably unrealistic, a combined scenario with a large "shock" increase in 2013 and then regular incremental increases of 10% after that would be more reasonable to propose," the report read. That means New Zealanders could realistically see the price of a pack of cigarettes rise to around $60 NZD ($49 USD) by 2025, according to 3 News.

That's a far cry from current prices. According to the Ministry of Health report, the cost of a pack of Holiday 20s -- New Zealand's best-selling cigarette brand -- now stands at $14.40 NZD ($11.70 USD).

But not all are in agreement that the plan will work. Dr. Steve Lim, senior economics lecturer at Waikato University, said that raising the cost of cigarettes to unaffordable levels would lead to a black market for tobacco and target poor families.

"People will find ways to circumvent this," Lim told the Waikato Times. "It would be reasonable to expect that underground markets would emerge for either smuggled or homegrown tobacco."

But advocates say the measures are necessary if the nation wants to achieve its goal of leading the world on anti-tobacco policy.

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