Austria's Tobacco Pricing: Affordable Or Expensive?

Austria has a reputation for being the ashtray of Europe, with a population that is considered to be among the least educated about tobacco in Europe. In 2022, 22% of Austria's population used tobacco, with a slightly higher prevalence among males (23.7%) compared to females (20.5%). The country has one of the highest rates of teen smokers in Europe, and adult Austrian women smoke cigarettes daily more than any other women in OECD countries (22%). Tobacco is the second leading risk factor for death and disability in the country, responsible for 20.1% of all deaths. Despite this, tobacco remains relatively cheap in Austria. A 20-pack of Marlboros costs €5.50 (US $6.14), while the same pack costs €9.30 in nearby France and £11.05 (US $14.31) in the United Kingdom.

Tobacco tax

The high tax rate has had some impact on consumption patterns, as evidenced by the decline in retail volume sales of cigarettes in 2023, falling below pre-COVID-19 levels. However, the effectiveness of tobacco taxation as a deterrent is limited by the easy availability of cheaper cigarettes from neighbouring countries. Before the pandemic-related travel restrictions, many Austrians took advantage of this by making shopping trips to eastern neighbour states, and even after the restrictions, 266 million people entered Austria, eligible to make direct imports of cigarettes.

To address this challenge, Austria implemented a ban on smoking in bars, cafes, and restaurants in November 2019. This move was met with protests and lawsuits from various sectors, including tobacco store owners and the leisure and gastronomy industries. Despite the controversy, the ban was a step towards creating smoke-free environments and protecting people from secondhand smoke.

In addition to taxation and smoking bans, Austria has adopted other measures to control tobacco use. These include graphical health warnings on cigarette packages and the ratification of the WHO Framework Convention on Tobacco Control in 2005 and the WHO Illicit Trade Protocol in 2014. However, tobacco use remains prevalent in Austria, with 22% of the population using tobacco in 2022, and it continues to be a leading risk factor for death and disability in the country.

Cigarette sales

Austria has implemented various measures to reduce tobacco consumption, including graphical health warnings on cigarette packages and a smoking ban in bars, cafes, and restaurants. Despite these efforts, tobacco remains a significant health issue in the country, contributing to a high number of deaths and disabilities.

The retail price for the best-selling cigarette brand in Austria includes 74% in taxes, which is higher than in neighbouring countries. This has led to smokers purchasing cheaper cigarettes from abroad, particularly from neighbouring countries with lower tobacco taxes, such as the Czech Republic and Slovakia. The high tax rate on cigarettes in Austria has also been cited as a reason for the decline in cigarette sales, as consumers may seek alternative nicotine products.

The tobacco industry in Austria is dominated by Philip Morris Austria GmbH, known for the Marlboro brand. However, with growing health concerns and declining social acceptance of smoking, cigarette sales are expected to continue declining in the future.

Youth tobacco use

Tobacco use among youth in Austria is a significant public health concern. In 2019, 25% of adolescents aged 14-17 were current cigarette smokers, with a slightly higher prevalence among boys (24%) than girls (26%). This trend persists into young adulthood, with 27% of those aged 15-24 smoking daily.

Austria has implemented various measures to address youth tobacco use, including designated smoke-free areas in healthcare, educational, and government facilities, as well as all other indoor public places. Additionally, the country has laws prohibiting tobacco sales to individuals under 18 and has adopted graphical health warnings on cigarette packaging. Despite these efforts, the tobacco industry continues to market its products aggressively to Austrian youth, and tobacco use remains a significant health risk, contributing to approximately 20% of all deaths in the country.

Austria's tobacco control policies have had some success, with a significant decline in daily smoking among adolescents and young adults between 2004 and 2020. However, the availability of alternative nicotine products, such as e-cigarettes, may hinder progress in reducing overall tobacco consumption among youth. Furthermore, the tobacco industry's aggressive marketing to lower-income populations and youth in Austria contributes to the persistence of tobacco use in the country.

To effectively address youth tobacco use in Austria, a comprehensive approach is necessary. This includes stricter regulation of tobacco marketing and sales to minors, as well as increased efforts to educate and support youth in refusing tobacco products. Additionally, addressing the social and economic factors that make tobacco use appealing to youth may help reduce its prevalence.

Tobacco alternatives

Tobacco in Austria is heavely taxed, with the retail price for the best-selling cigarette brand including 74% in taxes. This has led to a rise in Austrians shopping for cheaper cigarettes abroad, especially in neighbouring countries with lower tobacco taxes, such as the Czech Republic and Slovakia.

There are several alternatives to tobacco available on the market. These include:

• E-cigarettes: In 2020, 18% of respondents in a survey in Austria had used or at least tried e-cigarettes, with the highest usage rate among the 15-24 age group (28%).
• Heated tobacco products (HTPs): In 2020, 12% of respondents in Austria had used or at least tried HTPs, with the highest usage rate among the 15-24 age group (20%). HTPs are legally available in Austria and regulated as novel tobacco products.
• Nicotine replacement products (NRTs): In 2020, 24% of respondents in Austria who had attempted to quit smoking had used NRTs.
• Tobacco-free chew/dip: Some companies offer tobacco-free alternatives to traditional smokeless tobacco products such as chewing tobacco. These products often contain nicotine and are designed to provide a similar experience to tobacco without the associated health risks.
• Nootropics: Nootropics are substances that are claimed to improve cognitive function and are sometimes marketed as an alternative to nicotine. They can come in the form of pouches, drinks, or pills.

Tobacco retail

Tobacco sales in Austria are predominantly controlled by specialist retailers, who make about 70% of their revenue from tobacco products. Despite a growing negative perception of smoking, these retailers saw increased sales in 2023, driven by price hikes and favourable tobacco tax laws.

In 2023, retail volume sales of cigarettes experienced a notable decline, falling below pre-COVID-19 levels for the first time. This decline followed a pandemic-induced increase when travel restrictions limited access to cheaper cigarettes from neighbouring countries.

The retail price for the best-selling cigarette brand in Austria includes 74% in taxes, which is more than in any of the neighbouring countries. The high tax rate has not stopped tobacco sales in Austria, which still has high tobacco use rates among youths.

Consumer interest in heated tobacco, nicotine pouches, and e-vapour products continued to grow in 2023. Heated tobacco, perceived as less harmful, became the preferred option for smokers looking to reduce or quit smoking.

Philip Morris Austria GmbH strengthened its leadership in the Austrian tobacco market in 2023. Known for the prestigious Marlboro brand, Philip Morris continued to dominate the cigarette segment and benefited from its near-monopoly in heated tobacco products with its IQOS and HEETS brands.

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