Strange claim in Fairfax media

The Fairfax media is claiming:

The federal Treasury has entered the debate over cigarette sales, publishing previously secret information that shows sales falling since the introduction of graphic health warnings and plain packaging.

The Treasury collects data on sales per stick in order to levy tobacco excise, but has until now withheld it from publication to protect commercially sensitive information.

Added to the Health Department’s website quietly last week amid debate over the effectiveness of plain packaging, the Treasury data shows 3.4 per cent fewer cigarettes were sold last year than 2012. Plain packaging became mandatory on December 1, 2012.

Read the article very carefully. Note what is missing.

  1. No Treasury official named.
  2. No Treasury official quoted.
  3. No Treasury document cited.

The cite is to the Department of Health and Aging document released last week. I checked it just to make sure that no new information had been added. Doesn’t look like it. The document still states:

Tobacco sales data are not publicly available.

More importantly, it still claims:

The Commonwealth Treasury has further advised that tobacco clearances (including excise and customs duty) fell by 3.4% in 2013 relative to 2012 when tobacco plain packaging was introduced.

All that talk about data per stick in the Fairfax media is a (ahem) smoke screen. This how Treasury described their data in a 2010 email (emphasis added):

Excise and customs clearances are different from consumption data, as the taxing point is not the point of final sale …

Then there is this:

The Treasury data suggests that, adjusted for population growth of 1.7 per cent, the number of sticks sold per person slid about 5 per cent between 2012 and last year.

To the extent that the immigration program tends to select non-smokers and new-borns tend not to smoke at all, I’m not surprised that the per capita figure would indicate a fall in smoking. I hope the journalist contrived that statistic and not Treasury.

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51 Responses to Strange claim in Fairfax media

  1. Rabz

    Strange claim in Fairfax media

    In other news:

    - The sky is blue

    - Water is wet

    - The Pope is a socialist

    News at eleven.

  2. Yes. From the same school as your new chum Alan the Journalist who ‘contacted the ABS’.

    They WILL be right about this, no matter how much they have to lie to make it so.

  3. Aristogeiton

    Sinc, I’m still not clear on what these ‘clearances’ are. Is this measure the number of times that tobacco shipments have been cleared for entry for home consumption?

  4. Joe Goodacre

    Sinc,
    I don’t think you’ve intepreted Treasury’s email correctly.

    From the full email…

    Excise and customs clearances are different from consumption data, as the
    taxing point is not the point of final sale and provides no guidance as to the location of smokers. The number of
    smokers by state is provided in ABS 4362.0 – National Health Survey: Summary of Results; State Tables, 2007-2008. This could be used as a rough guide to gauge where the product is finally consumed.

    They are saying that the customs data is not the same as consumption data because consumption data indicates when and where it is consumed (whereas people could be importing and stocking inventories).

    Given that customs classifies when duty is paid on a per stick or measures by weight, it would seem probable to me that they have the capacity of working out the quantity of tobacco imported into Australia.

    Below is the different forms of Tobacco and how it is assessed for duty purposes.
    http://customs.gov.au/webdata/resources/files/ht24aw.pdf

  5. H B Bear

    As I read that 2010 email, the quoted section simply provides that excise and customs clearances cannot be used for a State breakdown of smoking behaviour, for example cigarettes imported through Melbourne may end up in WA, not that excise and customs clearances cannot be used to provide tobacco volume data per se.

    There may be other reasons why you could not use excise and customs clearances on aggregate tobacco import volume data as a proxy for final consumption (possibly destruction of unsalable stock, theft/shrinkage, goods for own use) but I am simply speculating.

  6. Sinclair Davidson

    Joe – Treasury claim that their data are not consumption data. Fairfax claims that it is. In addition Fairfax claim that the stick data are reflected in the Health department report. It isn’t.

  7. Aristogeiton

    Joe Goodacre
    #1356896, posted on June 23, 2014 at 3:27 pm
    [...]
    Given that customs classifies when duty is paid on a per stick or measures by weight, it would seem probable to me that they have the capacity of working out the quantity of tobacco imported into Australia.

    Evidence that this data is a volume measure? None. Evidence against:

    1) refers to ‘clearances’ (events);
    2) says that the measure ‘indicates’ volume.

    I’m not sure what Treasury is doing with these figures. The ATO collect data on clearances for GST purposes. Customs for imposing duty. What does Treasury have to do with it?

  8. Rabz

    Are these geniuses factoring in any kind of realistic increase in the consumption of black market tobacco, given the impact of the extortionate excise increases? The estimates I’ve seen appear to assume a constant rate.

  9. Mark

    Glad I clicked the link and read the email from Treasury, bc the way it’s described in the post is misleading. It’s clear that the email is highlighting the difference between the taxing point and final consumption in order to point to the limitations of the data in showing in which state cigarettes are actually consumed (bc it’s not necessarily the state in which it’s taxed).

    I don’t think there’s a plausible theory that would put daylight between sales volumes for tax purposes, other than trivial variations in inventory levels.

  10. Joe Goodacre

    My mistake Sinc – the Fairfax article is making claims it can’t substantiate based on the Treasury data. It is agreed that the data has no relation to sales.

    There remain a couple of issues though:

    a) is the quantity of tobacco imported into Australia down – it’s not clear whether Treasury is keeping weight constant when they refer to clearance events; and
    b) if weight is being kept constant and imported tobacco is down, what implications does this have to the argument that plain packaging is having no effect, or increasing consumption as people switch to lower priced, non-brand alternatives.

    I don’t know the answer to the first.

    I would suggest the second would not be good for the claim plain packaging was increasing consumption.

  11. Sinclair Davidson

    Joe – that is the problem. The data we do have are open to interpretation. I have no doubt, however, that if the data to demonstrate that plain packaging had worked existed, it would be in the public domain.

  12. Connor

    “To the extent that the immigration program tends to select non-smokers”

    Pretty bold claim there, Sinclair. Anything to back this up with?

  13. Joe Goodacre

    Except the government that voted it in, was shortly voted out after implementation.

    In that instance wouldn’t the onus shift to the other foot – if the data showed tobacco imports increased, that data would be made available an an example of another Labor policy going south.

  14. Aristogeiton

    Joe Goodacre
    #1356917, posted on June 23, 2014 at 3:41 pm
    [...]
    a) is the quantity of tobacco imported into Australia down – it’s not clear whether Treasury is keeping weight constant when they refer to clearance events

    It is not clear that these are events, but if they are, then a shipment is cleared for home consumption once, regardless of the volume.

  15. Aristogeiton

    Joe Goodacre
    #1356924, posted on June 23, 2014 at 3:48 pm
    Except the government that voted it in, was shortly voted out after implementation.

    In that instance wouldn’t the onus shift to the other foot – if the data showed tobacco imports increased, that data would be made available an an example of another Labor policy going south.

    Yeah, good idea genius. Cue howls of “Government is on the payroll of big tobacco”. Look what happened with Sinc when he dared suggest that the policy was not working.

  16. Joe Goodacre

    Mark,

    I don’t think there’s a plausible theory that would put daylight between sales volumes for tax purposes, other than trivial variations in inventory levels.

    I would tend to agree. We purchase capital equipment that may take months to get here. It would seem unlikely that something that is manufactured as quickly as tobacco would have large inventory levels in Australia. Why tie up more working capital by paying the duty before you had to? Would think that any response in demand to plain packaging would be seen in in two years worth of Customs data at the most.

  17. Sinclair Davidson

    Pretty bold claim there, Sinclair. Anything to back this up with?

    Always happy to assist people with their google searches:

    In all years analysed (2001 to 2010) people who were born outside Australia were significantly less likely to be smokers than those born in Australia. Also, in 2007, people who migrated to Australia after 1996 were significantly less likely to be smokers than those who had arrived prior to 1996 (Table 1.8.1) (16% compared with 18%, respectively), and also less likely to smoke than the average Australian (21%) (this question was not asked in the 2010 survey).

  18. Aristogeiton

    Mark
    #1356915, posted on June 23, 2014 at 3:41 pm
    [...]
    I don’t think there’s a plausible theory that would put daylight between sales volumes for tax purposes, other than trivial variations in inventory levels.

    We don’t have figures for sales volumes in Australia.

  19. Ubique

    No wonder Nanny is falling down on job. I heard on the wireless this morning our no no nanette is just too busy at the mo’ playing soccer at the world cup. For Portugal.

  20. walking through the tulips

    LOL.

    When faith-based ideology is flatly contradicted it seems there must be a conspiracy.

    The author presents like a tin-foil hat wearing nutter. Instead of being thankful for the newly released evidence and adjusting his beliefs to realign with facts, he has chosen to rigidly stick to his clearly incorrect views.

    There’s a name for people like that: cranks.

  21. jumpnmcar

    The Treasury collects data on sales per stick………

    Allright, how many ” sticks ” in a 50g pouch of White Ox and what’s the tax amount ?
    It must be less for rollies cause lots of people are switching away from taylories for cost reasons.

  22. Aristogeiton

    jumpnmcar
    #1356972, posted on June 23, 2014 at 4:19 pm
    The Treasury collects data on sales per stick………

    Allright, how many ” sticks ” in a 50g pouch of White Ox and what’s the tax amount ?
    It must be less for rollies cause lots of people are switching away from taylories for cost reasons.

    62.5.

    The excise is imposed per kilo, however. The maximum weight of tobacco in a cigarette is 0.8g if you want to be charged the stick rate. If you multiply the stick rate as 0.8 out to the kilogram rate, they are identical.

  23. .

    The author presents like a tin-foil hat wearing nutter. Instead of being thankful for the newly released evidence

    There isn’t any. You’re a left wing crackpot who wants to push your religious views on everyone else.

  24. Perfidious Albino

    The purported 3.4% reduction in ‘clearances’ in 2013 may just reflect a supply side adjustment in anticipation of reduced demand ie: less was imported by the tobacco companies.

  25. stackja

    SMH was told by SMH that SMH is correct.

  26. walking through the tulips

    .
    #1356987, posted on June 23, 2014 at 4:27 pm
    The author presents like a tin-foil hat wearing nutter. Instead of being thankful for the newly released evidence

    There isn’t any. You’re a left wing crackpot who wants to push your religious views on everyone else.

    So what’s this?

    By the way, you’re way off the mark regarding my views.

  27. Aristogeiton

    I don’t understand why we can’t have monthly data for:

    1) ‘stick rate’ excise collection; and
    2) per-kilo excise collection.

    None of this data is published. Why? It is certainly known.

  28. Aristogeiton

    walking through the tulips
    #1357007, posted on June 23, 2014 at 4:36 pm
    [...]
    So what’s this?

    By the way, you’re way off the mark regarding my views.

    No he’s not. You’re a crackpot. Explain to me what ‘tobacco clearances’ are, and how they are calculated. I want a link to the source as well. Go.

  29. jumpnmcar

    they are identical.

    People must be rolling them thinner to save i suppose.

  30. .

    By the way, you’re way off the mark regarding my views.

    No I’m not.

    You’re a bully and a thug who wants the state to force people at gun point to abide by your path to uptioia.

    You’re not better than any run of the mill totalitarian space cadet.

    Furthermore, you don’t even have any evidence, you pillock.

  31. Snoopy

    People must be rolling them thinner to save i suppose.

    Also some miscreants mix a little PP tobacco with PP marijuana to make their joints burn better.

  32. stackja

    walking through the tulips

    reminds me of:

    “Tiptoe Through the Tulips” is a popular song originally published in 1929. The song was written by Al Dubin (lyrics) and Joe Burke (music).

  33. entropy

    My old man used to do a gag impersonation of Tiny Tim singing tiptoe through the tulips for his rotary club. I think it was the closest he would come to wearing drag.

  34. entropy

    Even if you could get physical import data, it would not help as the number imported in any month would not have a direct bearing on consumption except over a longer timeframe. You might import a lot more in October, for example, in preparation for the Christmas party binge period, but less in December in expectation of New Years resolutions cutting back January consumption, but a bit more in Jan to reflect buying as those said resolutions fail.
    And then there is chop chop and roll your own.

  35. Steve

    “I don’t understand why we can’t have monthly data for:

    1) ‘stick rate’ excise collection; and
    2) per-kilo excise collection.

    None of this data is published. Why? It is certainly known.”

    It is commercially sensitive data with three companies, very tricky, you would agree.

  36. Aristogeiton

    Steve
    #1357072, posted on June 23, 2014 at 5:34 pm
    “I don’t understand why we can’t have monthly data for:

    1) ‘stick rate’ excise collection; and
    2) per-kilo excise collection.

    None of this data is published. Why? It is certainly known.”

    It is commercially sensitive data with three companies, very tricky, you would agree.

    Sorry, but what is commercially sensitive about it? It’s aggregated.

  37. Steve

    “It’s aggregated.”

    Not enough with only three companies. You may like the government to know and publish details of your sales so your competitors can see it. Some of us, including me, would prefer otherwise.

  38. Aristogeiton

    Steve
    #1357086, posted on June 23, 2014 at 5:47 pm
    “It’s aggregated.”

    Not enough with only three companies. You may like the government to know and publish details of your sales so your competitors can see it. Some of us, including me, would prefer otherwise.

    How do you think the data could be disaggregated? I suppose that you mean that one company knows the excised volumes of their own imports and they can derive that of their competitors?

    If we could get the volumes (not amounts) over the year instead of monthly data would that be ok? The government used to publish excise collected in the budget, didn’t they.

    There is a public policy dimension to this. People deserve to know, in the context of increasing government intervention in the market (and our free choice), the effect of the policy. We pay the tax ultimately, after all.

  39. Walking Through the Tulips is back. Who turned over that rock?

    Dear old Opinion Dominion is still paddling that canoe, by the way, Sinc, with the obligatory broadsides in your direction. I can’t wait till he gets his Photoshop mojo working again …

  40. Sinclair Davidson

    Dear old Opinion Dominion is still paddling that canoe, by the way, Sinc

    Poor Steve – I obviously occupy his thoughts all day.

  41. Warwick

    I was in country NSW on Saturday night. I met an older bloke that now buys his tobacco in kilo bags rough cut. He orders it by phone from someone in Wollongong. Half the smokers in town do it he said. He said it’s grown in Australia and just sold “off market”.

  42. Infidel Tiger

    Poor Steve.

    He has to put up with Homer being his only commenter and I know that Steve can’t stand him.

  43. James

    What about the black market ciggies that flood the market?

  44. Aristogeiton

    Classic idiocy from tulips/SfB here. Quotes from BATA spokesman to prove his point. BATA spokesman says the exact opposite to his conclusion.

  45. Tel

    Not enough with only three companies. You may like the government to know and publish details of your sales so your competitors can see it. Some of us, including me, would prefer otherwise.

    Stupidest thing I’ve heard today. There’s only three mobile networks in Australia so does that mean the government should be forbidden from publishing any statistics on mobile sales? Oh wait! Telstra publishes their own mobile sales in their annual report and strangely enough they don’t seem overly concerned that Optus know about it either.

  46. johanna

    And anyway, their numbers do not include illegally imported cigarettes (freely available if you know where to look) and substitutions like chop chop and people just growing their own.

    It is like measuring US alcohol consumption after the introduction of Prohibition based on legal imports (although I get what Sinclair is driving at.)

  47. Tel

    How many steel producers are there in Australia? Does BHP sit and bitch about the Australian Bureau of Statistics publishing a series on iron and steel production?

  48. A lot of this discussion hinges on an unknown definition for Tobacco Clearances.

    Note that in the Health document it talks about Tobacco Clearances including excises and Customs Duty. To me, this indicates that clearances must be a $ measurement, not a stick or kg measurement, otherwise, how do you add on the value of the excise & duty? So if clearances is measured in $, then it can’t reliably inform us on the actual quantity of tobacco imported. It is entirely feasible with plain packaging that as people switch form premium brands to cheapies, that consumption (in $) could be down, yet quantity (in sticks or kg) could be up.

  49. Dear old Opinion Dominion is still paddling that canoe, by the way, Sinc

    Poor Steve – I obviously occupy his thoughts all day.

    Better you than me.

  50. Aristogeiton

    Chalkbunny
    #1357614, posted on June 23, 2014 at 10:14 pm
    A lot of this discussion hinges on an unknown definition for Tobacco Clearances.

    Note that in the Health document it talks about Tobacco Clearances including excises and Customs Duty. To me, this indicates that clearances must be a $ measurement, not a stick or kg measurement, otherwise, how do you add on the value of the excise & duty? So if clearances is measured in $, then it can’t reliably inform us on the actual quantity of tobacco imported. It is entirely feasible with plain packaging that as people switch form premium brands to cheapies, that consumption (in $) could be down, yet quantity (in sticks or kg) could be up.

    If this is the case, then the increase in the excise is skewing the numbers.

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