Impact of China National Tobacco Company's 'Premiumization' Strategy: longitudinal findings from the ITC China Surveys (2006-2015)

Abstract

Background: In 2009, the China National Tobacco Company (CNTC) began their Premiumization Strategy, designed to encourage smokers to trade up to more expensive brands, mainly by promoting the concept that higher class cigarettes are better quality and less harmful. This study is the first evaluation of the strategy's impact on: (1) prevalence of premium brand cigarettes (PBC), mid-priced brand cigarettes (MBC) and discount brand cigarettes (DBC) over 9 years, from 3 years pre-strategy (2006) to 6 years post-strategy (2015); and (2) changes in reasons for choosing PBCs, MBCs and DBCs.

Methods: A representative cohort of adult Chinese smokers (n=9047) in seven cities who participated in five waves of the International Tobacco Control (ITC) China Survey: pre-implementation (Wave 1 (2006; n=3452), Wave 2 (2007-2008; n=3586)); mid-implementation (Wave 3 (2009; n=4172)); and post-implementation (Wave 4 (2011-2012; n=4070), Wave 5 (2013-2015; n=2775)). Generalised estimating equations were conducted to examine changes in prevalence of PBCs, MBCs and DBCs, and reasons for brand choice from pre-implementation to post-implementation.

Results: From pre-implementation to post-implementation, there was an increase in prevalence of PBCs (5.4% to 23.2%, p<0.001) and MBCs (40.0% to 50.4%, p<0.001), and a decrease in DBCs (54.6% to 26.5%, p<0.001). There was an increase in smokers who chose their current brand because they believed it to be less harmful, both for MBC smokers (+13.0%, p=0.001) and PBC smokers (+9.0%, p=0.06). There was an increase for smokers in all brand classes for choosing their current brand because they were 'higher in quality' and because of affordable price, but the greatest increase was among PBC smokers (+18.6%, p<0.001 and +34.9%, p<0.001, respectively).

Conclusions: Our findings demonstrate that the rising trend in Chinese smokers' choice of 'less harmful', 'higher quality' and 'affordable' cigarettes, particularly PBCs, is likely due to CNTC's aggressive marketing strategies. Strong tobacco control policies that prohibit CNTC's marketing activities are critical in order to dispel erroneous beliefs that sustain continued smoking in China, where the global tobacco epidemic is exerting its greatest toll.

Keywords: economics; price; social marketing; taxation; tobacco industry.