How the sales of oral nicotine pouches correlate with prices and respond to taxes on cigarettes and e-cigarettes

Abstract

Background and aims: Oral nicotine pouches (ONPs) have seen a dramatic rise in sales since their introduction to the US market in 2016. We aimed to define the relationship between ONP prices and sales (e.g. price elasticity of demand) and determine how taxes on cigarettes and e-cigarettes (ECs) impact ONP sales. Methods: Using Nielsen ScanTrack data, we employed the Ordinary Least Squares technique and several statistical specifications to examine the relationship between ONP prices and sales, as well as the impacts of other tobacco taxes on ONP sales in the US. Results: A 10% increase in ONP prices was associated with 2.3% (P < 0.05) lower sales in convenience stores, which account for 92% of total ONP sales. Higher cigarette (but not EC) taxes increased ONP sales, indicating that ONPs likely serve as economic substitutes for cigarettes but not for ECs. Conclusion: Higher prices are associated with lower sales of oral nicotine pouches (ONPs), which suggests that taxes on ONPs may be effective in reducing ONP use. Moreover, increasing cigarette taxes (but not e-cigarette taxes) may shift consumption from cigarettes to ONPs.