Plain packaging: bad for business, good for criminals

Last August, when the government closed their second consultation on standardised packaging, Imperial Tobaccostated that plain packaging would be good for criminals, bad for retailers and that there was no evidence it would achieve the Department of Health’s objectives.

Despite the vast majority of consultation responses being against the proposed legislation the Government announced last month its desire to push ahead with the policy regardless of the fact that there was no credible, or new, evidence. Tellingly, the consultation report was only published three weeks later.

In the next few weeks, the House of Commons may have a free vote on the introduction of plain packaging; so let’s talk ‘plainly’ about what this might mean.

Plain packaging would be a gift to criminals who are currently peddling illicit tobacco in our communities, often targeting children and other vulnerable groups. Counterfeit production would become easier and without brands, price would become the driver of consumer choice. The cheapest product will always be found in the illicit market; lower prices would mean greater accessibility to children, not less.

In Australia, the only country to have implemented plain packaging, the evidence is plain – since its introduction two years ago it has had no discernible impact on youth smoking or smoking prevalence. According to the Australian Government, youth smoking has increased from 2.5% to 3.4%[1] whilst illicit trade has increased by 25% since its introduction, now accounting for 14.3% of total consumption[2]. The UK government’s consultation report totally ignores the evidence from Australia.

Plain packaging would threaten the livelihoods of legitimate retailers on our high streets, the cornerstone of local communities. Tobacco sales currently account for 30% of their turnover[3], without any brands prices will fall, directly impacting retailer margins. Indeed, a report for the Centre for Economics & Business Research highlighted that up to 3,500 stores could be lost as a direct result of the introduction of plain packaging.

Plain packaging would destroy legitimate intellectual property rights and this could act as a dangerous tipping point for other brands which the government may target in the pursuit of public health. Put simply, not only do brands act as a valuable and necessary point of differentiation for consumers, they are protected by national, European and international laws.

We trust that common sense will prevail; we have long said that we actively support proportionate evidence-based policy.  Plain Packaging simply isn’t an example of this.

[1] Australian Government National Drug Strategy Household Survey 2013
[2] KPMG Illicit Trade in Australia Report October 2014
[3] Office of Fair Trading figures