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How consolidation in Big Tobacco could actually be good for public health | Quartz

The prospect of consolidation in most industries tends to freak people out—think of the widespread concerns about Comcast and Time Warner Cable’s looming tie-up—because they can lead to outcomes that are not friendly to consumers, such as higher prices. The Reynolds-Lorillard deal has been rumored for a while now, and Credit Suisse opined on it back in May.

“We find it extraordinary that such a concentration of market share can be considered. Lorillard have a 15% share, Reynolds 27%, still a way behind Altria’s 50%, but it would surely create an effective duopoly. We believe that the US anti-trust authorities would want a very close look indeed.”

But hang on a second. If the aim of regulators is to protect consumers, maybe higher prices aren’t such a bad thing. The tobacco industry is unlike most other industries, in that it is selling products that are acknowledged to be extremely harmful to consumers. Governments have intentionally driven cigarette prices up with taxes because (as well as creating tax revenue) expensive cigarettes seem to discourage smoking. So, if the byproduct of further consolidation in Big Tobacco is gouging smokers, wouldn’t that be a good thing for society as a whole?

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How consolidation in Big Tobacco could actually be good for public health.

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