Media ReleaseCollaborate Against Cancer21 Sep 2020

T21 economic modelling shows health care benefits far outweigh impact on small business tobacco sales profitability

A new report shows that the impact of Tobacco21 on small and medium licensed tobacco outlets in Tasmania will be relatively low.

Teenager smoking cigarette
A teenager smoking a cigarette outside. Photo Credit: KatarzynaBialasiewicz via Getty Images.

New independent economic modelling shows a relatively low expected impact on gross profit from tobacco sales for the small Tasmanian retail sector if the legal sales age of smoking products is increased to 21 years.

In partnership with SmokeFree Tasmania, Minderoo Foundation commissioned an independent economic analysis at the request of the Tasmanian government. The report shows an expected total impact of between $500,000 to $1.5million per annum in gross profit for the less than 600 small businesses who currently hold retail tobacco licenses across Tasmania over the phased implementation period of five years.

The Tobacco21 bill intends to cut smoking uptake for young adults, with long-lasting health benefits and reductions in tangible costs. Beginning in the year after legislation is passed, it is proposed to raise the minimum sales age for tobacco products in three annual steps from 18 to 19, 20 and then 21 years.

Since the bill was introduced by Independent Windemere MLC, Ivan Dean, lobbyists have been targeting Tasmanian politicians to block the proposed bill, arguing it would negatively impact small businesses.

The report by Wells Economic Analysis focuses on the 593 small and medium licensed tobacco outlets in Tasmania, which account for 40 per cent of tobacco sales. The analysis does not include large supermarkets, wholesalers and vending machine sales. Impact was assessed in terms of the effect of the T21 proposal on gross profit per store over a five-year period.

Dr Kathryn Barnsley, Co-Convenor of SmokeFree Tasmania, said retailer representatives making claims about tobacco control and its impact on revenue loss was not new.

“The peak retailer organisations never act in the interest of the health of Tasmanians on tobacco reforms – this analysis shows a relatively low expected total impact on gross profit whereas smoking related health costs are billions of dollars and are far more severe on our economy,” Dr Barnsley said.

Minderoo Foundation Chairman Dr Andrew Forrest AO said the evidence internationally showed that raising the minimum legal age for the sale of tobacco products to 21 would save Tasmanian lives.

“We continue to deliver everything the government has asked for in order to support this critical change, including evidence of the success of T21 internationally; analysis of the likely impact on young smokers locally; feedback from key local stakeholders, including young adults and retailers, and an analysis to assess the limited economic impact these additional measures may have on retailers,” Dr Forrest said.

“The time has come to draw a line in the sand. The time is right for Tasmanians to lead Australia in tobacco prevention measures. Importantly, Tasmania already has an effective Tobacco Control Plan and licensing compliance regime to build on, to prevent a new generation of smokers starting. It is imperative that we bring down smoking rates in Tasmania from the second highest in the country to the lowest. Tasmania is the ideal place to implement T21 with successful results, and now is the time to do it.”

Ivan Dean urged the Tasmanian government to support the Tobacco21 bill when it is read in coming weeks.

“We have the evidence which shows Tobacco21 reduces smoking uptake and save lives,” Mr Dean said.

“We can see that a broad range of the community, including young people, support the legislation. We have evidence to show that Tasmanian businesses will not be significantly affected by the proposed legislation. There are no excuses for continuing to block a change which we know will save lives.”

Recent research on Tobacco21, conducted by the Menzies Institute for Medical Research, analysed Tasmanian smoking rates, perceptions of young people and other stakeholders from government, non-government and retailers, as well as the efficacy of the policy internationally.

The analysis found that most Tasmanians, including young people and stakeholders, support or agree with Tobacco 21. Associate Professor Seana Gall said the Tobacco21 bill would strengthen Tasmania’s existing tobacco control strategy by contributing to activities to reduce the uptake of smoking.

Tobacco21 is a measure focused on the supply of tobacco products, including e-cigarettes. It would prohibit the sale by retailers of tobacco products to people under the age of 21 and be implemented within Tasmania’s existing tobacco control framework and monitored through Department of Health systems used to enforce the current legislation prohibiting the sale of tobacco products to people under the of 18.

Minderoo Foundation
by Minderoo Foundation

Established by Andrew and Nicola Forrest in 2001, we are a modern philanthropic organisation seeking to break down barriers, innovate and drive positive, lasting change. Minderoo Foundation is proudly Australian, with key initiatives spanning from ocean research and ending slavery, to collaboration in cancer and community projects.

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