Earlier this year, smokers around the country were hit with a 61.1 cent increase in the federal tax on cigarettes. Combined with state and local taxes, packs of cigarettes in some areas now cost $10 or more. Some officials say that in addition to raising much-needed revenue, higher prices will cause more smokers to kick the habit. Based on an analysis of sales of over-the-counter smoking cessation products such as nicotine gum, patches and lozenges, Nielsen found that high prices may indeed prompt some smokers to try to quit.
For the 52-weeks ended April 18, 2009, sales of these products on an equivalized unit volume (EUV) basis grew 4.4 percent over the same period in 2008 (1,747,202,576 versus 1,673,456,878). In 2008, EUV grew 9.3 percent over the same time period in 2007.
More telling, however, are figures from the first four months of 2009. For the four-week period ended January 24th, EUV was up 14.2 percent from the previous four-week period, and up 10.2 percent over the same time period in 2008. For the four weeks ended February 21st, EUV increased 12.3 percent over the previous four-week period, and up almost 20 percent the same period a year ago. The four weeks ended March 21st showed a 4.6 percent increase from the preceding period and a jump of 23.3 percent over the same period last year. Finally, for the four-weeks ended April 18th, sales on an EUV basis declined 3.5 percent from the previous period, but posted a 20.2 percent increase over the same period in 2008.
“The data does suggest that smokers may have used the recent tobacco tax hikes as an opportunity to quit,” said Todd Hale, Senior Vice President, Consumer and Shopper Insights at Nielsen. “We will continue to track the sales of over-the-counter smoking cessation aids to determine if sales increase further or whether this is a temporary trend.”