Legislation that we believe is ineffective and unlawful
One of the main reasons why we are against plain packaging of tobacco products is because we believe it is not an effective way of reducing smoking levels.
Some people think that the colours, designs and trademarks used on cigarette packs make them more appealing, particularly to young people.
However, there is no compelling evidence to suggest that plain packs are effective in discouraging young people from smoking, encouraging existing smokers to quit or preventing quitters from taking up smoking again.
In December 2012, Australia became the first country to introduce plain packaging. After five years it is clear that plain packaging is not achieving its primary policy objective of reducing smoking incidence. The Australian Government’s own data shows no significant decline in the Australian smoking rate between 2013 and 2016. This is the first time in over two decades that no statistically significant decline was recorded.
There has, however, been a significant increase in the size of the illegal tobacco market – the criminals behind this illegal trade are now profiting at the expense of Australian taxpayers, with the Government losing around AUS$1.6 billion in tax revenue annually.
We believe there are more effective ways of addressing smoking rates, such as targeted youth anti-smoking programmes and better enforcement of existing laws governing the sale of products to young people.
Another important reason why we oppose plain packaging is that we consider it to be unlawful. This is because it involves governments taking property from businesses – in this case our trademarks and other intellectual property – without paying for it. That is illegal under the laws of many countries around the world.
A properly functioning consumer goods market relies on having clearly differentiated brands with different quality and price positioning.
These differentiating features are all provided by brand trademarks, which enable existing adult smokers to differentiate between brands.
Trademarks and branding also provide quality assurance for consumers and retailers – plain packaging removes this assurance.
International trade law requires countries to respect and protect trademarks. This is why four countries – Cuba, Honduras, the Dominican Republic and Indonesia – are challenging Australia’s plain packaging laws before the World Trade Organization.
A few other countries – including the UK, Ireland and France – have also introduced plain packaging legislation. However decisions in one country do not set a precedent for other governments to introduce plain packaging. No two jurisdictions are the same and any government considering plain packaging will need to ensure that it complies with the fundamental rights of businesses, as protected both by the laws of that country and internationally, while also being mindful of the ongoing World Trade Organization dispute on plain packaging.
A recent expert report authored by Professor Kip Viscusi analyses the impact of plain packaging in Australia. The analysis looks at data from January 2001 to December 2016, a longer time period than any other publication studying the impacts of plain packaging in Australia. Professor Viscusi concludes that the tobacco packaging changes introduced in Australia in 2012, which included plain packaging and enlarged graphic health warnings on tobacco packaging, have had a zero effect on smoking prevalence rates in Australia. The report further considers the analyses of the RMSS dataset, previously analysed by Dr Chipty which is relied upon in the Australian Post Implementation Review of Plain Packaging.
Professor Viscusi’s report can be accessed here:
Neil Dryden, Executive Vice President at the economic consulting firm Compass Lexecon, has analysed the impact of plain packaging in Australia on cigarette consumption, cigarette prices and downtrading by using New Zealand (where plain packaging had not been implemented) as a benchmark comparator. He provides the most up to date and extensive analysis of the consumption data by covering retail cigarette sales data from January 2009 to December 2016 (thus providing four years of data in the post-plain packaging period, which is a longer time period than any published study). Mr Dryden’s report shows that – as compared to the no-plain packaging scenario – plain packaging is associated with an increase in per capita consumption, a decrease in the average retail prices paid for cigarettes and an increase in downtrading to lower-priced products. He also presents an alternative empirical analysis of plain packaging’s effect on cigarette consumption using Australian-only data, which likewise confirms that plain packaging is associated with an increase in per capita consumption.
In March 2015, British American Tobacco launched a legal challenge against the UK Government’s decision to implement plain packaging. In an initial ruling, the English High Court found against BAT and the other tobacco claimants, declaring plain packaging to be lawful. However, BAT was granted permission to appeal the decision to the Court of Appeal. In November 2016, the Court of Appeal upheld the original decision. Our response to the initial ruling and the Court of Appeal’s decision are available below.
The UK Government held a second consultation on the plain packaging of tobacco products in July/August 2014. Our response to the consultation sets out the reasons why we oppose plain packaging. You can download a copy below.
In January 2014 we provided a written submission to the UK Chantler Review into the public health impacts of standardised packaging for tobacco products. Our written submission is available below:
We welcome the opportunity to respond to government consultations on regulatory issues. You can download a copy of our submission to the UK Government’s 2012 consultation on plain packaging of tobacco products below:
A 2011 report that we commissioned from Deloitte on packaging regulation also showed that neither increasing the size of health warnings on packs nor introducing graphic images over a number of years had directly reduced tobacco consumption.
Read the full Deloitte report here: