Question to the HM Treasury:

To ask His Majesty's Government what action they are taking to combat the pricing strategies of (1) under-shifting, and (2) over-shifting, by the tobacco industry to protect the public health aims of tobacco taxation.

Like most businesses across the economy, tobacco producers and retailers are free to set prices for their products. Evidence suggests that close to 100% of tax increases, and in many cases more, is passed through to consumers through prices. How this is distributed across products is a matter for the individual firms.

The UK has some of the highest tobacco taxes in the world which have helped reduce smoking prevalence to 11.9%.

In order to protect the public health objectives of tobacco taxation the Minimum Excise Tax sets a minimum amount of duty collected on a pack of cigarettes. This discourages manufacturers from selling cheap cigarettes as it reduces the profitability of cigarettes sold at or below the trigger price of £13.59 for a pack of 20 cigarettes.