Tobacco pricing and affordability: the relative affordability of cigarettes in Lebanon following the 2019 financial crisis

Abstract Background Decreasing tobacco affordability and hence consumption reduces its burden, which is often accomplished through taxation. In a financial crisis, the drop in consumers’ incomes could create a similar effect to an increase in taxation, as it results in a similar decline in affordability. However, the effect of a financial crisis on tobacco consumption is ambiguous because: (i) consumption of tobacco also depends on the affordability of other items (which are also changing); and (ii) tobacco companies use pricing strategies to affect affordability. To date, neither complexity has been fully explored. In this study, we explore the impact of an economic crisis on tobacco affordability using Lebanon as an exploratory​ case study, as the economy has been in an economic depression since 2019. Methods We examine changes in population level affordability using data on cigarette prices, key food and non-food items, and consumer incomes. We use publicly available documents and data from an original interview conducted with the state-owned tobacco monopoly (the Regie ). The aim is to better understand the Regie ’s pricing practices adopted during the economic crisis and their impact on tobacco affordability in absolute and relative terms. Results The price of cigarettes, food, and non-food items, increased faster than overall inflation, making them less affordable. In relative terms, the fall in cigarette affordability was weaker than that for food and non-food items. The interview revealed that the Regie adopted a price breakdown approach using multiple exchange rates to set prices. This meant the wholesale price was around half of the price implied by the black-market rate widely used in the country during the economic crisis. The Regie also adopted other strategies previously documented in response to tax increases, such as price smoothing and brand proliferation. Conclusion During Lebanon’s economic crisis, the Regie’s pricing strategies helped maintain cigarette affordability and encourage down trading to cheaper brands. Stronger tobacco taxation and regulation of pricing practices are needed to support tobacco control. Using Lebanon as a case study offers valuable insight into the context of economic crises, with important implications for public health.