Plain Packaging Fails
Cigarette Sales Rise in Australia
6 Jun 2014
Cigarette sales in Australia have increased since the introduction of plain packaging, according to the Australian. The increase has come from budget brands that are no longer identifiable as being cheaper due to their packaging.
Plain packaging was introduced in December 2012 and was hailed at the time by Labor Health Minister Nicola Roxon as the "world’s toughest anti-smoking laws". But the plan appears to have backfired as half of the increase in sales have come from the cheaper brands, suggesting that smokers merely switched brands and smoked more because they were cheaper.
Research by InfoView, which monitors the industry, showed market share for cheaper cigarettes rose from 32 percent to 37 percent over the year. Cigarette giant Philip Morris, which owns Marlboro, says it had not seen a drop in demand since the new packaging came in. Whereas British American Tobacco Australia said the number of people quitting had dropped, and sales volumes were increasing.
The Australasian Association of Convenience Stores chief executive Jeff Rogut said sales by his members grew by $120 million or 5.4 per cent last year. He said: "Talking to members, one of the most common refrains they get from people coming into stores is, ‘What are your cheapest smokes?"He also claimed that the move to lower priced cigarettes was leading to people coming back more often.
The projected tax take from tobacco in 2017 – 2018 is $10.98bn compared with just $7.85bn this year, suggesting that the Australian Federal Government is aware that its laws are unlikely to have the stated effect of reducing smoking.
Australia introduced plain packaging despite warnings to the parliamentary inquiry - set-up to look at the subject - from a number of group that plain packaging would either have unintended health consequences or have little or no benefits. When the inquiry reported in 2011 it stated there were concerns that plain packaging would "force manufacturers to compete on price, rather than brand, with the unintended consequence of reducing the price of tobacco products".
The figures released relate to legally sold and taxed cigarettes, but the increase in sales may be much higher when counterfeit and black-market cigarettes are included. Plain packaging makes it far easier for criminals to produce fake cigarettes, which are of a far lower quality and much more dangerous that those produced by reputable firms.
In one case reported on by the Herald Sun earlier this year Australian customs seized 80 million counterfeit cigarettes. This has led to campaigners claiming that it might be safer if packaging became harder to copy instead of easier.
The UK has toyed with plain packaging despite concerns about the health risks. Health Minister Jane Ellison stated earlier this year that she did intend to push ahead with the policy but it was not included in the Queen’s speech.
The country is already awash with counterfeit cigarettes as tobacco taxes are much higher in the UK than they are in continental Europe. Unsuspecting customers in bars and nightclubs buy what they believe are ‘bootlegged’ cigarettes from France: i.e. cigarettes from genuine manufacturers that have been brought to the country without paying tax. In fact what they are getting are dangerous, unregulated counterfeits from China.
However, the country may still push forward with plain packing to placate the growing anti-smoking industry who push for ever more draconian laws even if the rules are of dubious benefit to public health. The industry comprises charities, campaign groups and NHS bodies all employing large numbers of activists.
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