The price of cigarettes in the European Union

A major factor influencing tobacco use is its price. Fiscal policies on tobacco are a key ingredient of any comprehensive control strategy, as they can be used to raise prices. The European Union (EU) developed directives to ensure some harmonisation of the fiscal pressure on tobacco across its member states.

To provide a simple comparison of tobacco prices in the EU, adjusting for the purchasing power of each currency.

For price comparisons, a 20 units pack of Marlboro was the reference product, and data refer to April 2000. Purchasing power parities (PPP) for each member state currency have been compiled. These are currency conversion rates, which convert to a common currency and equalise the purchasing power of different currencies.

Nominal prices of a Marlboro pack for each member state, and a price index, estimated taking as reference the EU mean. Adjusted prices and an adjusted price index have been estimated using PPP.

Nominal prices show wide variation, with the cheapest pack in Portugal (59) and the most expensive in the UK (196); the range of variation is three-fold. However, PPP adjusted prices reveal a different distribution. In three countries adjusted prices are outliers, but all other countries make two clusters, one around the average EU index of 100, the other around a lower value of 85.

These results suggest that fiscal harmonisation policies in the EU do not have an even effect at reducing availability by its impact in price.