The 130th Annual Meeting of APHA

5145.0: Wednesday, November 13, 2002 - 2:48 PM

Abstract #39498

Are Marlboro cigarettes cheaper on the Internet than in retail stores?

Annice E Kim, MPH, Dept of Health Behavior & Health Education, UNC School of Public Health, CB#7440, Rosenau Hall, Chapel Hill, NC 27599-7440, 919.966.3761,, Kurt M. Ribisl, PhD, Department of Health Behavior and Health Education, University of North Carolina at Chapel Hill School of Public Health, Rosenau Hall CB#7400, Chapel Hill, NC 27599, Drew Lindsey, BA, Center for Interdisciplinary Substance Abuse Research, Research Triangle Institute, 3040 Cornwallis Road, P.O. Box 12194, Research Triangle Park, NC 27709, and Matthew C. Farrelly, PhD, Center for Economics Research, RTI International, 3040 Cornwallis Road, P. O. Box 12194, Research Triangle Park, NC 27709-2194.

Industry analysts predict that 20% of U.S.' annual $40 billion cigarette sales will occur via the Internet. Escalating state excise taxes have likely fueled demand for chaper cigarettes. This study compared retail and online prices of Marlboro cigarettes, the leading U.S. brand, to assess whether Marlboros are cheaper on the Internet than in stores.

The online median price for Marlboros was calculated from 74 Internet cigarette vendors (ICVs) in January 2000; the median online price for duty-free Marlboros was estimated from 19 ICVs. The average retail Marlboro price was determined from AC Nielson scanner data of 50 grocery store markets for the 1st quarter of 2000. AC Nielson markets were grouped into four intervals based on the market's cigarette excise tax. The average retail price of a Marlboro carton in these four intervals was compared to the median Internet price.

The median online price was $28.60 for Marlboro and $23.85 for duty-free Marlboro. The average AC Nielson retail prices were $31.34 in markets with excise tax > 75 cents and $23.28 in markets with excise tax less than or equal to 25 cents. A smoker who resides in a high excise tax state such as California or New York would save $2.74 or $7.49 a carton by purchasing Marlboro Regular or Marlboro duty-free cigarettes, respectively, via the Internet. This translates into annual savings of $213.12 for a pack-a-day smoker who purchases 3-cartons of Marlboro at a time via the Internet. Policy implications for tobacco control will be discussed.

Learning Objectives:

Keywords: Tobacco Taxation, Tobacco Policy

Presenting author's disclosure statement:
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.

Internet: Threat or Promise for Tobacco Control

The 130th Annual Meeting of APHA