The ads will commence Nov. 26. Full-page newspaper ads will run in major U.S. metropolitan areas, and 30- to 45-second spot ads will be shown on the ABC, CBS and NBC television networks. In North Carolina, the newspaper ads will be published only in Charlotte. The ads are projected to cost several millions of dollars for each manufacturer. R.J. Reynolds Tobacco Co. said Tuesday that it could cost $20 million to comply. Reynolds spokesman David Howard said Reynolds remains the entity obligated to comply with the court order even though it is now the U.S. subsidiary of British American Tobacco PLC.
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Is this a way to increase the falling government tax revenue? The National Health and Morbidity Survey 2015 reported, about five million of the Malaysian population aged 15 and above were smokers. Deaths caused by smoking are set to increase to 30,000 in the year 2020. The government has decided to raise cigarette prices once again to curb the nation’s rising cigarette consumption. Using cigarette tax hike as a solution has failed to work Price hikes intensified around the year 2014, and there was a sharp decline of 12% in legalised sale of cigarettes. During the most recent tax hike, prices for a pack of 20 cigarettes rose from RM17 (US$4.02) to RM21.50 (US$5.08). Illicit cigarette trade filled up the gap left by legal sales. Its penetration rate increased from 36.3% in 2011 to 51% in 2016. This resulted in an estimated loss of RM4.4 billion (US$1.06 billion) in government revenue last year. From the year 2011 to 2015, average cigarette prices went up by more than 30% . If the price hikes do deter consumers, there should have been a corresponding decrease in total cigarette consumption.