Plain packaging is a policy with potentially significant consequences, not all of which are well understood. We believe governments need to think proposals like this through very carefully and conduct more robust research.
We firmly believe that tobacco products are only suitable for adult consumers and do not want children to smoke. But there is no proof to suggest that the plain packaging of tobacco products will be effective in discouraging young people to smoke, encouraging existing smokers to quit, or increasing the effectiveness of health warnings.
Some governments have already considered plain packaging and decided not to pursue this measure due to the lack of evidence and legal hurdles. However, the debate has not gone away. The WHO wants countries introducing new laws as a result of signing the Framework Convention on Tobacco Control to consider forcing all product packaging to be plain or unbranded.
This is a guideline and not binding on governments, however the UK and New Zealand governments have both announced public consultations on the issue.
Submission to the UK government plain packaging consultation
In November 2011, the Australian government passed a bill to make plain packaging law in 2012, even though it admitted during an October 2010 senate hearing that it was unable to quantify whether the measure would have any effect. Following royal assent of the bill in December 2011, British American Tobacco Australia launched proceedings against the government in the Australian high court. In August 2012 the High Court announced its decision in favour of the government.
Read our response to the decision of the Australian High Court
We are strongly opposed to plain packaging of our products. We do not believe it will result in the outcomes sought by governments but will bring a real risk of serious unintended consequences.
Those who support plain packaging believe that it will give children "one less reason to start smoking", yet there is no proper evidence to suggest that plain packs would have any effect on smoking uptake by anybody, including children.
In fact, studies — funded by governments and tobacco control bodies — show that packaging is not a factor that influences people to start smoking. A May 2012 study commissioned by the EU Health Department showed that the most significant elements that influenced people to start were friends and parents smoking.
And an international Deloitte report, commissioned by British American Tobacco, revealed that increasing the size of health warnings on packs and introducing graphic warnings had not directly reduced tobacco consumption. With this in mind, it called into question whether plain packaging will ever achieve government health objectives.
Plain packaging and the black market
We believe a policy designed to make tobacco less accessible to youth could actually end up having the opposite effect — by increasing the black market and making the products cheaper and more accessible.
Generic packaging would make it harder to prevent smuggled and counterfeit products entering a market, eroding government tax revenue and disrupting efforts to tackle the illegal trade in tobacco products that plays a significant role in funding international crime and terrorism. It’s a concern that has been raised by many, including business organisations and law enforcement professionals.
The International Chamber of Commerce (ICC) ‘Business Action to Stop Counterfeiting and Piracy’ group warned of the impacts Australia’s plain packaging legislation could have:
Plain packaging is simply wrong and bad public policy. Once brands are removed and all packaging is made to look the same, it is easy to imagine how much simpler it will be to counterfeit a pack of cigarettes. It will reduce brand owners’ ability to take action against counterfeiting and will increase the burden on already overstretched public agencies as they try to keep illicit products away from consumers.
The plainer the pack, the simpler it is to counterfeit. In Australia, more than one in ten cigarettes smoked is already black market, costing an estimated A$1.1 billion a year in lost tax income.
The same concerns were raised during the UK government’s consultation. In an open letter to The Times (paywall) , a group of former senior policemen wrote:
Our concern is very much on the impact that it could have on crime and in particular on serious organised criminals who are the target of the major law enforcement agencies... Irrespective of your views on smoking, measures that appear to benefit the criminal community must be given serious consideration before being taken any further.
Criticism of the proposal also came from a former Assistant Chief Constable of Northern Ireland :
Plain packaging of cigarettes will make life easier for criminals, while the police will have a much tougher time. Instead of 200 different designs of packs to copy, there would be just one... This well-meaning proposal, intended to make more of our young people safe and healthy, will actually make it easier for criminals to threaten the well-being of those closest to us.
And a former Commander of Specialist Operations at New Scotland Yard, writing in the Huffington Post , said:
I'm concerned about some of the counterproductive measures being proposed by the government, aimed at reducing smoking, with the potential to make the current criminality of illicit and counterfeit cigarettes much worse.
He also believed it will create a new market for illicit branded products, illegally imported from abroad or counterfeited. And as consumers won’t be aware of what genuine branded product looks like, fakes will be easier to pass off.
The impact on price
Without branding, price will become the main factor in consumers’ purchasing decisions. This gives a big incentive to illicit traders who are able to supply the product at the cheapest price.
And the black market doesn’t check if consumers are old enough to buy cigarettes.
Protecting our brands
We believe we are entitled to use our packs to distinguish our products from those of our competitors. Our brands are our intellectual property which we have created and invested in. Plain packaging would deny us the right to use brands.
But also, a brand is also an important tool for consumers. As the British Brands Group has stated , plain packaging legislation "ignores the crucial role that branding plays in providing consumers with high quality, consistent products they can trust".
The restriction of valuable corporate brands by any government would risk placing it in breach of legal obligations relating to intellectual property rights and, in most cases, international trade.
Speaking in response to the announcement of the UK government's consultation, Andrew Wilson, Director of Policy at the International Chamber of Commerce in the UK (ICC UK), highlighted particular concerns about the potential impact of plain packaging rules on international trade:
It remains unclear as to whether plain packaging is compatible with a number of the UK’s international trade commitments - including important WTO intellectual property agreements. With protectionism on the rise, this is not the time for the UK to be testing the limits of international trade law.
We will take every action possible to protect our brands, the rights of our companies to compete as legitimate commercial businesses selling a legal product, and the interests of our shareholders.