Tobacco tax is reviewed every year by the Chancellor of the Exchequer. However, this policy was abandoned in the pre-Budget statement issued in November 1999. After the March 2000 Budget, the recommended retail price of 20 premium brand cigarettes was 4.17, of which 3.23 was tax. The price of cigarettes has a major effect on cigarette consumption. Higher tobacco taxes reduce smoking and smoking related sickness.
Public opinion is largely in favour of increased taxation, according to various opinion polls.
Tobacco is the most heavily subsidised crop per hectare. A high proportion of tobacco grown in Europe is unmarketable and is sold at give-away prices to Eastern Europe and Africa. It is very difficult to obtain accurate figures on how much the tobacco industry spends on advertising. In the mid 1990s it was estimated that around 50 million was spent on advertising cigarettes in the press and 15-20 million on posters. Since the Government announced its intention to ban tobacco advertising, the tobacco industry has reduced expenditure on advertising and shifted marketing funds to sponsorship, direct mail and other promotions.