The 13th World Conference on Tobacco OR Health

Objective: On January 1, 2002, Taiwan joined in the World Trade Organization (WTO) and implemented a new tax scheme for tobacco. Ever since, the Taiwan cigarette market has been considered to be influenced by the YR2002 market liberalization and tax reform.

Methods: This study used governmental statistics and national survey on cigarette consumption to examine the reaction of cigarette market after YR2002 from three market aspects: (1) retail price change of cigarette after taxation, (2) substantial increase on new brands of cigarette, (3) product change of cigarette content, in terms of nicotine level.

Results: The results showed that YR2002 tobacco tax raise was by 6 dollars per pack of twenty cigarettes, while the retail price increased by 10 dollars per pack--29.6% increase for domestic cigarettes and a 21.6% increase for imported cigarettes. Since Taiwan joined the WTO, the numbers of imported cigarette brands increased from 60 to 99 brands (65.0%) in the period of 2001 to 2004. The domestic ones also increased from 24 to 32 brands (33.3%). The proportion of lower-nicotine (nicotine level under 0.5mg) cigarette brands increased from 16.7% in 2001 to 23.5% in 2004. The results from this study implied that YR2002 new taxation policy and market liberalization induced the increase of retail price higher than tax raise level. In the mean time, the cigarette market has become more active. However, shifting to cigarette supply of lower-nicotine or light favors, Taiwan people were subject to higher potential health risk because of receiving wrong impression on cigarette on “healthy” cigarette.