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Cigarette pricing is an important aspect of the tobacco industry because price is an effective way to reduce global smoking prevalence, according to the Framework Convention on Tobacco Control (FCTC). Don Hedley, research analyst at Euromonitor International, explains that there is an ongoing argument between tobacco companies and the FCTC regarding cigarette pricing. While the FCTC says that lower prices will reduce smokers worldwide, tobacco companies say that higher prices will increase illicit trade in the global tobacco industry. Governments can also weigh in on the issue, as taxes on tobacco products generally benefit governments. Governments can also insist that manufacturers raise prices to generate more revenue.
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