Plain packaging of tobacco products
Legislation that we believe is ineffective and unlawful
One of the main reasons why we are against plain packaging of tobacco products is because it is not an effective way of reducing smoking levels.
Plain packaging does not work
We encourage governments and regulators to focus instead on effective interventions, including establishing policies that support smokers to transition to reduced-risk products.
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.
This is evident from the experience in Australia, the first country to implement plain packaging in December 2012, where the evidence shows that:
- there has been no acceleration in the long-term smoking rate decline since plain packaging was introduced;
- plain packaging is associated with an increase in the consumption of cigarettes;
- plain packaging has not increased the effectiveness of health warnings;
- plain packaging is associated with a relative reduction in the prices of cigarettes; and an acceleration in the shift from premium to non-premium brands in Australia.
The Australian Government’s own data shows that after the introduction of plain packaging the decline in the smoking rate slowed — not accelerated — between 2013 and 2019. Other data further demonstrate that that plain packaging has not been effective and there is evidence suggesting it has had a counterproductive effect, resulting in an increase in cigarette consumption rather than a decrease.
Analysis of data from the UK and France, where plain packaging was implemented in 2017, similarly indicates that plain packaging has had zero effect in the UK and is associated with a statistically significant increase in per capita cigarette consumption of 5% in France.
Plain packaging has also undermined other public health, social and economic objectives, including:
- exacerbating the illicit trade problem;
- stimulating price competition leading to downtrading to cheaper products, which in turn can lead to an increase in consumption;
- distorting competition and raising barriers to entry; and
- stifling innovation.
There has been a significant increase in the size of the illegal tobacco market in Australia – the criminals behind this illegal trade are now profiting at the expense of Australian taxpayers, with the Government losing an estimated $2.9 billion in tax revenue in 2020 alone.
We believe there are more effective ways of achieving government objectives of reducing tobacco-related harm, such as endorsing tobacco harm reduction policies, implementing strong anti-illicit trade plans, targeted youth smoking prevention programmes and better enforcement of existing laws governing the sale of products to young people.
Stripping branding strips our rights
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.
Plain packaging eliminates the use of trademarks and, in doing so, destroys their value. As a result, decades of investment in brands and their related trademarks, along with their inherent goodwill, would be lost.
Trademarks are used by manufacturers as an essential tool to distinguish their goods from similar products. The function of trademarks is to indicate the source or origin of the product and to identify the product by distinguishing it from its competitors. Trademarks also symbolise a product's quality and features and guarantee that the goods or services measure up to expectation. Trademarks are essential for effective competition in the market, as they enable firms to uniquely identify and differentiate their products other than on the basis of price alone. They are an important tool to permit market penetration and facilitate local and international trade. Trademarks can only perform these functions if they can be effectively used as they were registered.
Brands, including trademarks, play an important role in the cigarette market, and their erosion or elimination changes the nature of the market. In general, markets without brands become price-driven commodity markets, which can lead to an increase in consumption and illicit trade.
Expert report of LUISS Business School and Deloitte Financial Advisory, Italy on the impact of Plain Packaging on cigarette consumption in France and the UK, dated 19 July 2021.
This report analyses the impact of plain packaging on cigarette consumption in both France and the UK. France implemented plain packaging in January 2017 and the UK in May 2017. The authors conducted an econometric analysis of cigarette consumption data. The authors conclude that plain packaging has not reduced cigarette consumption in France or the UK. On the contrary, there is some evidence to suggest that plain packaging has actually had a counterproductive effect in France, resulting in an increase in cigarette consumption rather than a decrease.
Expert report of LUISS Business School and Deloitte Financial Advisory, Italy on the impact of plain packaging on smoking in Australia, dated 8 November 2019.
The report analyses the impact of introduction of plain packaging regulation in Australia in December 2012 on smoking prevalence and tobacco consumption over a 5-year period - using data up to December 2017. The report is the most comprehensive published analysis of the data from Australia. The authors conclude that plain packaging has not reduced smoking prevalence or tobacco consumption, and there is some evidence to suggest that plain packaging has had a counterproductive effect, resulting in an increase in cigarette consumption rather than a decrease.
This report can be accessed here: https://businessschool.luiss.it/news/tobacco-consumption-in-australia/
Expert Report of Professor Viscusi on the effect of Australian plain packaging on smoking prevalence, dated January 2018.
Australia. The analysis looks at data from January 2001 to December 2016. 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. Analyses of Australian Government survey data presented by Professor Viscusi also demonstrates that the implementation of plain packaging in Australia has not increased the effectiveness of graphic health warnings.
Professor Viscusi’s report can be accessed here:
Expert Report of Mr Neil Dryden on the effect of Australian plain packaging on cigarette consumption, dated 10 October 2017
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.
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