Tuesday, 15 September 2015

Plain Ciggies

Fools, Horses and Health Zealots

Regardless of what view one holds on tobacco and the merits or otherwise of tobacco smoking one issue is becoming more clear by the day.  State ordered  universal  "plain packaging" does nothing to reduce tobacco purchases (and by implication, smoking itself).  In fact, the evidence is showing that it does the reverse: it actually increases tobacco consumption.

A blog post evaluates the latest data from Australia--which country was stupid enough to introduce plain packaging.

New data confirm that tobacco sales rose after plain packaging

As reported last week by Guido and Catallaxy Files (but no mainstream media outlets that I know of), tobacco sales increased by 0.5 per cent in the first year of plain packaging in Australia. I didn't want to comment until I'd had a change to look at the newly published stats in depth, but I have now done so and the figures in Guido's report are spot on.

21,901,393,720 cigarettes were sold in the twelve months before plain packaging was introduced. In the next twelve months, 22,016,130,420 cigarettes were sold. This is a rise - a small rise but a remarkable one considering that sales had been consistently falling for many years before the policy was introduced. . . .

We already knew from other sources that the long-term decline in tobacco sales came to an end in the first year of plain packaging and only resumed after a heavy tax hike in December 2013. This new and more accurate data confirms it. This deserves to be bigger news. The UK, Ireland and France have committed to plain packaging based on a lie. ASH used the bogus 3.4 per cent figure in their lobbying and, as Davidson points out, the French even claimed that there was a 3.4 per cent decline in smoking prevalence.

Australia is in the process of conducting a post-implementation review into plain packaging. If this evidence is not front and centre, we will know that the process is a sham. Predictably enough, it seems that the post-implementation review has already shifted the goalposts. The policy was explicitly designed to reduce cigarette sales and smoking prevalence. Since it is now clear that it has had no measurable effect on either, the review will instead look at whether it has reduced the appeal of cigarette packs. That means looking at the same tenuous evidence that was cited by campaigners in 2011 - evidence that tells us nothing about the real world effects. . . .

The data

The government's sales figures are divided between domestically produced tobacco products (ATO) and imported tobacco products (customs). They are also divided between manufactured cigarettes (sticks) and rolling tobacco (loose leaf).

To derive the total number of cigarettes sold, you need to combine the ATO and customs figures for both type of products and then subtract the refunds. For loose leaf tobacco, the government calculates that one cigarette contains 0.8 grams of tobacco, ie. 1 kilogram contains 1,250 cigarettes.

In the twelve months before plain packaging was introduced (Dec 2011-Nov 2012), the figures were as follows:

Manufactured cigarettes: 19,738,170,960

Cigarettes from rolling tobacco: 2,447,248,750

Never sold to the public: -284,025,990

Total: 21,901,393,720 

In the twelve months after plain packaging was introduced (Dec 2012-Nov 2013), the figures were as follows:

Manufactured cigarettes: 19,433,987,920

Cigarettes from rolling tobacco: 2,582,142,500

Total: 22,016,130,420  

Sales increase in the first year of plain packaging = 0.524%
If you owned a tobacco company you would be laughing all the way to the bank right now.  All the previous investment that had to go into brand creation and maintenance to secure consumer loyalty would now be dropping straight to the bottom line.   All the advertising overhead would also have be instantly transformed into profit.

Secondly, if you were a criminal gang, huge business opportunities have been opened up for illicit manufacture and smuggling of tobacco products.  Tobacco smuggling has become instantly a high margin, low risk business.

And thirdly, the plain packaging rort has increased consumption.  It has made tobacco into more of an everyday commodity, so that consumers can afford to spend more and indulge more.

Not that this will stop the messianic zealots.  They will double down.

Hat Tip: Kiwiblog

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