The Impact Of Retail Distribution On Tobacco Consumption: Research Agenda

This paper reports the first stage of a joint research project which seeks to explore the relationship between the level of retail distribution and cigarette smoking. Whilst conventional wisdom would suggest that “supply follows demand”, there is evidence from studies on alcohol and fast food, as well as tobacco, that increases in supply, via retail distribution, lead to increased consumption. Whilst consumers will shop from multiple outlets and will switch between outlets, these findings suggest that restricting supply may limit the aggregate level of smoking, the adoption of smoking by the young and/or recidivism among “tobacco quitters”. The paper also outlines a proposal for empirical testing of this relationship. Background Cigarette smoking represents the biggest source of preventable disease in developed and developing countries throughout the world and, in recognition of this fact, governments and particularly health authorities have engaged in long-term campaigns to limit tobacco smoking. The principal focus of such campaigns has been to limit demand through advertising campaigns designed to highlight the disastrous effects which smoking can have on individuals, particularly the young who might be tempted to take up smoking. While results of such campaigns have been mixed, there has been a measurable decline in the aggregate level of smoking. Such campaigns which seek to limit demand will remain the principal focus of the efforts of health authorities. At the same time, a yet-unanswered question is the impact which supply, generally, and retail distribution, specifically, has on tobacco consumption; in particular, the impact of distribution intensity (broadly understood as the number of distribution outlets (largely made up of supermarkets, petrol stations, convenience stores and tobacconists) per head of population or within a given geographical area. An obvious implication of this question is that, if a measurable link between distribution intensity and tobacco consumption can be established, then it follows that restrictions on tobacco retailing might be usefully pursued as a public policy objective. This is the background to the current study being undertaken by a team at Macquarie University in conjunction with the Cancer Council of New South Wales. The project is being undertaken in stages, the first of which was to review the relevant literature on the link between retail distribution and category consumption of fast-moving consumer goods in general, and tobacco, in particular. This literature review is the focus of this paper. In addition, proposals to measure the statistical relationships between retail distribution and tobacco consumption are discussed.