Tobacco tax hike: Higher cigarette prices prompt some concerns that smokers could turn to cheaper, illegal vaping

SINGAPORE — As retailers here began raising cigarette prices following this week's tobacco tax hike, most regular smokers who spoke to TODAY said that they intend to either cut down on the habit or find cheaper ways — including illicit ones — to get their nicotine fix.

Out of 11 smokers interviewed by TODAY, two said that they would resort to using electronic vaporisers or e-vaporisers — a cheaper but illegal method of smoking — while two intended to buy their cigarettes from Malaysia where they are cheaper.

Another smoker told TODAY that he intended to do both.

Three of the interviewees said that they would try to cut down or quit altogether. Of the remaining three, two intend to keep smoking while one was quitting for health reasons regardless of the tax hike.

On Tuesday (Feb 17), in his Budget speech, Deputy Prime Minister Lawrence Wong announced a 15 per cent hike in excise duty on tobacco here, in a move aimed at raising Government revenue and discouraging the use of such products. 

Singapore last raised its tobacco excise duty in 2018 and 2014, each time by 10 per cent.

PREMIUM CIGARETTES UP ABOUT S$1.50 A PACK

A check with five retailers and two retail chains found that they have already increased or are planning to increase the retail price of tobacco products this week, with the hike amounting to about S$1.50 per pack.

This meant that certain premium cigarette brands could reach above S$15 for a pack of 20 sticks.

Despite this, a 32-year-old who wanted to be known only as Adam, said that he would not quit smoking but instead turn to alternatives such as rolled tobacco or buy some cigarettes whenever he makes trips to Johor Bahru.

The technician, who picked up smoking in his teens and goes through 15 sticks a day, said while he could get behind the Government’s objective to encourage healthier living, smoking to him has “become a habit like snacking”.

“If you like to snack, you will keep buying snacks even if the price increases, right?” he said.

Meanwhile, e-vaporisers have been gaining in popularity in Singapore in recent years, even though the sale and possession of the devices is illegal.

One online ad directed at Singapore residents was selling a disposable e-vaporiser device which can last for "2,000 puffs", or the equivalent of 200 to 300 cigarettes, for S$14. 

E-vaporiser refill pods, which according to smokers are the equivalent to one pack of cigarettes, meanwhile can cost under S$5 each.

An IT professional, who wanted to be known only as Brian, said he would be looking to replace cigarettes with an e-vaporiser, which he already uses. He currently finishes a pack of cigarettes every three days.

“Smoking keeps me awake at times at work, and is a convenient ice-breaker that can help me socialise outside of my circle,” said the 35-year-old on why he does not see himself quitting anytime soon.

Meanwhile, Mr Dion Lim, 31, a public relations professional, said he has already been thinking of quitting for some time, and the recent hike might be "the push" he needed to follow through with his plans.

"The measures are good for people like me who is on the verge of quitting I guess. I don't think it will deter those who have no intention to quit," he said.

The number of people caught here for using and possessing e-cigarettes has been going up in recent years, according to figures by the Health Sciences Authority (HSA).

In 2022, 4,916 people were caught for the offence. This was six times higher than the 811 caught in 2019. In 2020 and 2021, the numbers stood at 1,266 and 4,697 respectively.

In September last year, HSA said 428 people have been caught selling vapes from 2018 to August 2022. A total of 91 were prosecuted in the same period.

Each offence carries a fine of up to S$2,000. 

ARE RETAILERS SEEING AN ACTUAL DEMAND DROP?

A spokesperson for the FairPrice chain of supermarkets and Cheers convenience stores, with more than 300 outlets here, said the prices of some of cigarettes sold have been adjusted to reflect the increase in excise duties, while others "remain unchanged, pending further review with our suppliers".

The spokesperson did not respond to TODAY's query on the impact of the tax hike on sales.

A spokesperson for DFI Retail Group, which owns more than 550 supermarkets and convenience stores under the Cold Storage, Giant and 7-Eleven brands, said its shops will be lifting their cigarette prices on Friday and Saturday.

DFI expects an overall drop in demand, as happened in 2018, and for lower-priced tobacco products to become more popular.

Ms Connie Lim, who owns Umart Hock Ghee Seng Mart at Jurong East, also recalled a slight drop in cigarette sales in 2018 following the tobacco taxes hike.

“But after a while, customers came back. They either got used to the new prices, or failed after trying to quit”, she said.

Other retailers such as Mr Eric Teo, co-founder of uMart, which has convenience stores in Balestier and Kovan, said cigarette prices have already gone up twice this year, with the first when the Goods and Services Tax (GST) hike kicked in.

But he does not expect a big impact on his sales of cigarettes.

“It’s a small base number to begin with. The slight price increase, I don't expect it to move the needle much,” he said.

Mr Andrew da Roza, an addictions psychotherapist at Visions by Promises, the addiction therapeutic arm of Promises Healthcare, said that demand for tobacco products is inelastic, meaning that “a large increase in price leads to a small decrease in demand”.

“Further, smokers, like all consumers, get used to paying more, and eventually accept the new prices and resume their old behaviour,” said Mr da Roza, who also sits on the board of the Singapore Anti-Narcotics Association.

He said that other ways smokers may adjust their behaviour is by using cheaper tobacco products like a less premium brand or rolled cigarettes, or turning to illicit ones.

MORE TAX EQUALS MORE VAPING?

The Singapore Minimart Association, with more than 70 members, is concerned about losing cigarette-buying customers to the illegal market such as e-vaping.

Mr Alan Tay, the association's chairman, said it “understands the Government’s intention to raise revenue and reduce smoking prevalence” but is worried inflation and the GST hike is driving tobacco users to illegal options.

“Since borders have fully reopened last year, almost 20 to 30 per cent of our previous smoker consumers have moved to contraband cigarettes or illicit vapes.”

Ms Lim, the Jurong East minimart owner, shared this concern.

Given the difficulty of kicking addictions, Dr Tan Kok Kuan, who has run a quit smoking programme for 15 years at Dr Tan Medical Centre at Novena Medical Centre, was concerned about how people may resort to illicit products such as e-vaporisers or untaxed cigarettes to fulfil their nicotine craving.

“(Illicit tobacco) leads to loss of government revenue, increase in criminal activity, places strain on law enforcement and makes actual smoking rates in Singapore harder to track and monitor,” said Dr Tan.

He said Australia, another country with strict laws and hefty taxes on tobacco products, has seen a rise in e-vaporiser users, particularly among the young.

In a Guardian report in November last year, Australia’s health minister was cited as saying that vaping rates had doubled in Australia between 2016 and 2019 as tobacco taxes increased. 

Dr Tan also voiced concerns how the higher cigarette prices “may have a disproportionate impact on people of lower socioeconomic status”, given the higher prevalence of smoking among them based on national data, and how the cost of cigarettes would form a bigger proportion of their smaller income.

Ministry of Health figures from the 2021 National Population Survey showed that the prevalence of daily smoking among Singapore residents aged 18 to 74 with below post-secondary education was about double that of residents with post-secondary education.

The overall rate of smoking among residents has been hovering around 10 per cent in recent years.

Assistant Professor Yvette van der Eijk of the NUS Saw Swee Hock School of Public Health, while noting the existence of the illegal market, said that there are also countries with very lax tobacco control policies, including low taxes, but a large illicit tobacco market. 

“The tobacco industry often argues that tobacco taxes cause illicit trade and have funded studies to support this argument,” she said.

She added that independent studies had showed that raising tobacco taxes does not lead to an increase in illegal alternatives such as vaping.

“If the illicit vaping market does grow, as it seems to have done in recent years, it will not be because of taxes, but because of poor enforcement of illicit trade, especially those online overseas sellers targeting Singaporeans.” ADDITIONAL REPORTING BY NABILAH AWANG