Member

Secondly, it would allow the Government to have greater control over the market. The combination of tobacco being highly addictive and four companies having almost a monopoly in the UK leads to severe market failures. We tax tobacco, quite rightly, to incentivise quitting. However, the industry gets around that because it just ups the price, so the cost goes on the consumer rather than on the profits that these companies are making. When there is a tax hike, prices on luxury brands go up even more and prices are kept lower on the budget ones, which undermines the public health objectives of tobacco taxation.