Exactly one year ago, on 1st of December 2012 Australian law demanded plain packaging of tobacco products. The regulation was accompanied with set of other restrictions. An increase in the tobacco excise of 25 per cent, legislation to restrict Internet advertising of tobacco products in Australia, and more than $85 million in anti-smoking social marketing campaigns, including $27.8 million for campaigns targeted at high-risk and highly disadvantaged groups that are hard to reach through mainstream campaigns were enforced.
The government of Australia reasoned that plain packaging will:
- increase the noticeability, recall and impact of health warning messages
- reduce the ability of packaging to mislead consumers to believe that some products may be less harmful than others
- reduce the attractiveness of the tobacco product, for both adults and children.
Now, one year after this experiment plain packaging is on the headlines in the UK. In July, Government decided to revert an earlier decision on enforcing plain packaging in the UK. This caused a public outrage, as it was evident that the decision was influenced by Coservative party political strategist, Mr. Lyndon Crosby, whose company was representing not only the ruling party, but also Phillip Morris International, an U.S. based tobacco company and leader on the market. The Prime Minister David Cameron in an attempt to minimize the impact of the outrage changed his mind and told the public that his government would further evaluate the impact of the plain packaging looking for the evidence from the Australia.
Source: FT.com
Whether it is a political plot or a real attempt to act basing on the evidence, the cause is important for British people. As Jane Ellison, the public health minister, said to BBC:
People do feel strongly and quite rightly. This is fundamentally about children’s health – we know that two-thirds of people start smoking when they are children. I don’t blame parliament about feeling strongly about this issue. It is one of the most important public health issues we face in this country.
Indeed, the main reason behind plain packaging is reducing attractiveness of smoking for the underage. It is estimated, that every day 570 British young people start smoking. Still, Mr. Cameron gave his Ministers time until March 2014 to come back with the report.
In the same time, we already have some evidence, provided by the tobacco industry itself. According to the KPMG report on Illicit tobacco in Australia, the plain packaging did achieve a side effect of increasing illicit import of the tobacco, which costs Australia A$1 billion ($910m) in tax revenues. The report commissioned by Big Tobacco companies states that:
- The level of illegal consumption of tobacco reached record levels, growing from 11.8% to 13.3% from June 2012 to June 2013.
- The key driver of this growth has been a large increase in the consumption of illegal, branded cigarettes, primarily in the form of contraband. Consumption of counterfeit cigarettes has also increased.
- The 154% increase in black market, branded cigarettes has come at the same time volumes of illicit unbranded tobacco, known as “chop chop” in Australia, have declined by 40%.
- If these black market purchases had been made in the legal market, the government would have collected AUD1.0 billion in additional excise tax revenue.
Another report provided by PMI and performed by London Economics has analyzed smoking prevalence in Australia. According to this research, there was no significant change in smoking habits following the introduction of plain packaging despite an increase in the noticeability of the new health warnings.
On the other hand, there is a research of Centre for Behavioural Research in Cancer and sponsored by Quit Victoria anti-smoking organization, conducted on 536 adult smokers in Australia. This report shows, that plain packaging is associated with lower smoking appeal, more support for the policy and more urgency to quit among adult smokers.
International reactions on the Australian experiment are mixed. New Zealand and Ireland are planning implementation of plain packaging. In the same time some governments (Indonesia, Ukraine, Honduras, Dominican Republic and Cuba) are filing a dispute in WTO against Australia. Big Tobacco companies – British American Tobacco, Britain’s Imperial Tobacco, Philip Morris and Japan Tobacco – have already lost they legal battle against Canberra in the Australian High Court in August 2012.
Now, the main argument of the industry is that plain packaging does not reduce any harm caused by smoking, just support criminals living off the illicit trade and smuggling of branded tobacco products from the countries with less rigorous regulations. They also claim that taking away their intellectual property in form of the labelling and brand signage is just helping in producing counterfeits (that may be even more dangerous for health than original products).
Looking at the beautifully encrusted cigarettes cases and tins so common in the past it is hard to believe that plain packaging will really reduce a number of smokers. We also do not really believe that the impact of such ban will be on the youngsters trying to smoke their first cigarette. In the real world this first cigarette is the one that was purchased by someone else, and it is just one stick not a package. Still limitation of the branding and labeling, combined with ban on advertising makes cigarettes even more commodity than it was before. The regulation may then impact big producers promoting smaller outlets, and as Big Tobacco points out it will vastly support illicit trade, which offers not only cheaper but also nicer packages from other markets.
