Plain Packaging Has Other Fish to Fry, Not Tobacco

All the Plain Packaging Lobby Really Wants is to Hear Tobacco Companies Squeal

The lessons from Australia are clear: plain cigarette packs may are a dream come true for the counterfeiters and may not even reduce smoking

Christopher Snowdon  
The Telegraph 
January 22, 2015

So much for evidence. With every indicator showing that plain packaging in Australia has been, at best, a damp squib, the campaign for this risible policy was won with the one oft-repeated question: "Why would the tobacco industry spend so much time and money lobbying against plain packaging if it didn’t work?"

Like all rhetorical questions, it is supposed to answer itself: "Because they know that plain packs will deter people from smoking, stupid." The answer is clear, simple and wrong because it confuses profit with volume. Profit margins are bigger on premium brands, which is why big cigarette brands - just the brands, not the cigarettes - are worth billions. Get rid of the branding and many smokers will turn to cheaper brands which have tighter margins.

This point was made by Professor John Britton on the Today programme this morning when he said that plain packaging was likely to lead smokers to switch to cheaper fags. This, he said, “makes tobacco less profitable, which is bad news for the industry and that’s why they’ve been opposing it.” It is rare for an anti-smoking campaigner to state this so explicitly, but with the battle won the truth can be told. It is quite conceivable that plain packaging could harm the industry without reducing its customer base. Indeed, the law of demand suggests that a shift towards cheaper cigarettes could lead to more cigarettes being sold.

Then there is the problem of counterfeit and smuggled cigarettes. Illicit tobacco is widely available in the UK, costing the exchequer around £2 billion in lost revenue, and there has been a sharp increase in contraband tobacco in Australia since plain packaging was introduced. It is worth reflecting on the changing nature of Australia’s black market since we are likely to see a similar phenomenon in Britain quite soon. When the Australian law came into effect, many people, including myself, expected counterfeiters to mass produce ‘plain’ cigarette packs. A few did, but the main trend was towards completely fake brands with all-singing, all-dancing pack designs. These brands have never existed as legitimate products in Australia. One of them, known as ‘Manchester’, came from nowhere to gain a 1.5 per cent market share despite being an obvious fake. It seems that many smokers dislike the plain packs, as was the intention, and are prepared to turn to the black market for a more retro look. Conventional packs have become status symbols.

It goes without saying that the legal tobacco industry doesn’t benefit from counterfeit and fake cigarettes, nor does it benefit from people shifting to budget brands. The Australian experience has clearly shown that these are the real unintended consequences of plain packaging. They offer sufficient explanation for the industry’s opposition without the need to assume that the policy ‘works’ as a health measure.

Public health campaigners ignore these facts. Instead, they use something called ‘the scream test’ as their golden rule. In the words of one anti-smoking activist, this means that “If the tobacco industry complains loudly and long and lobbies all the politicians it can find then you know that you are winning. You know that whatever it is the anti-tobacco campaigners or governments have done is going to reduce sales of tobacco.”

The scream test offers a glimpse into the mind of the modern zealot and suggests that the real target is not cancer, but profit-making businesses. It is a nonsensical notion. It is easy to think of sensible health measures with which industry agrees, just as it is easy to think of ridiculous policies about which industry "screams".

Making laws to outrage company executives as if that were an end in itself is the politics of the playground. It is also deeply counterproductive. Public health has nothing to gain from counterfeiting and brand-switching.

After years of decline, Australian tobacco sales plateaued in the first year of plain packaging and there is evidence that underage smoking is on the rise. Has the anti-smoking lobby’s war with the tobacco industry reached such hateful depths that it would prefer to see the cigarette market in the hands of organised criminals than have "Big Tobacco" make money and pay taxes? It seems it has.