Taxation and pricing

Section title

Taxation and pricing

Brief definition of policy approach

Control of taxation and pricing to reduce young people’s participation in addictive behaviours

Description of policy approaches

Taxation and pricing measures are typically used to make young people’s participation in addictive behaviours less affordable. For alcohol, this includes measures such as minimum unit pricing, increased taxes on beverages that are believed to be popular with young people, or restrictions on promotional activities believed to encourage excessive drinking. For tobacco, this can include restrictions on the sale of cigarettes in small quantities (e.g. fewer than 20 cigarettes) to reduce their affordability (especially for young people). In the absence of a legal market, these approaches are not relevant to illegal drugs.

Typical measures included under this approach

  1. Taxation and pricing measures, including restrictions on promotions and other financial incentives
    • Alcohol – Tax and excise duty control; comparative pricing strategies; minimum alcohol unit pricing; restrictions on direct and indirect pricing promotional activities, discount sales, sales below cost, flat rates for unlimited drinking
    • Tobacco – Tax and excise duty control; personal restrictions on importation; comparative pricing strategies; restrictions on size of product sold; Restrictions on promotional activities
    • Illegal drugs – Cost or reimbursement (to prevent non-medical use of prescription medicines)
    • Gambling – Tax and excise duty

Summary of available evidence for interventions and policies

  1. Beneficial
    • Adolescents and college students are sensitive to price and increasing the price of tobacco products reduces youth smoking. Males are more responsive to price than females; evidence concerning age and ethnicity is less consistent
  2. Likely to be beneficial
    • No evidence identified
  3. Mixed evidence
    • No evidence identified
  4. Unknown effectiveness
    • No evidence identified
  5. Ineffective
    • No evidence identified

Key Reviews