Tobacco Industry Arguments

Five independent systematic evidence reviews have been published which all conclude that plain packaging is likely to contribute to reducing the use of tobacco products.

These evidence reviews consider over 80 peer reviewed scientific research studies, notable for their breadth and diversity of methods, and for strong consistency in showing that plain packaging will be effective. The Chantler Review from the UK stated that all the evidence “points in a single direction, and I am not aware of any convincing evidence pointing the other way.”¹

The tobacco industry's evidence has been shown to be flawed. None of the studies used by the tobacco industry to oppose plain packaging have been peer reviewed; almost all were funded by the industry and have been the subject of serious criticism by academics and judges for their flawed methodology.²

There is six years of post-implementation research (PIR) and statistical data from Australia, all of which points towards the measure being effective.

The official statistical evidence from Australia shows an increase in the rate of decline of both smoking prevalence and tobacco consumption after implementation. The PIR analysis attributes a 0.55 percentage point reduction in smoking rates to plain packaging, equivalent to 118,000 less smokers over the 34 months after implementation.³

INDUSTRY ARGUMENT: It Will Increase the Illicit Trade in Tobacco as Plain Packs Are Easier to Counterfeit

 

The scale of the illicit tobacco trade is related to price and availability which are not effected by plain packaging. The biggest impact on supply is through effective enforcement action.

The tobacco industry has for years been complicit in the illicit market by oversupplying low tax regimes.⁵ The industry simply cannot be trusted in relation to the illicit market.

 

In Australia, official figures show that the illicit tobacco market has reduced since implementation. Customs and Excise seizure volumes are significantly down⁶ and national surveys show that far fewer people report using illicit tobacco.

The Customs and Revenue department in the UK produced a detailed report that concluded plain packaging will have no impact on the size of the illicit market.⁷

The tobacco industry has exaggerated the data and manipulated the press over this issue.⁸

The only study relied on by the industry on illicit trade in Australia is by KPMG in which the methodology used is fundamentally flawed.⁹ Even the KPMG report finds that “Through to the end of 2014, there has been no evidence of counterfeit plain packaging cigarettes”. KPMG also wrote to the UK government stating the report does not support “the contention that plain paper packaging could lead of itself to an increase in tobacco smuggling”.

In their legal challenges to plain packaging the tobacco companies submitted no supporting evidence, data or experts and made this claim “by mere assertion.”¹⁰

INDUSTRY ARGUMENT: It Will Commoditize Tobacco, Leading to Price Reductions, and Thereby Increasing Demand

After plain packaging in Australia, tobacco companies continued to increase their prices in all market sectors, over and above the tax rate increases.¹¹ The same price increases were seen in the UK. Even if prices were to fall this could be offset with increases in taxation.

INDUSTRY ARGUMENT: It Is the Start of a Slippery Slope and Will Lead to Plain Packaging for Other Products

Tobacco is a uniquely damaging product which requires unique regulations. Only tobacco control is the subject of the first and only public health international treaty. The aim of tobacco control is to eradicate all tobacco use and have a ‘tobacco free society’. This is not the case for the regulatory control of other potentially unhealthy consumer products.

The tobacco industry often uses the ‘slippery slope’ argument to try to resist tobacco control measures¹² such as health warnings. To date, only tobacco products carry large graphic health warnings so the slippery slope argument has not turned out to be true for other tobacco control measures.

Tobacco is the only product that the World Health Organization recommends plain packaging for.¹³ Plain packaging of other products has not so far been proposed in any country that has adopted plain packaging of tobacco products. There is as yet very little research evidence in relation to plain packaging of other products that could support such proposals.

INDUSTRY ARGUMENT: It Breaches International and Domestic Intellectual Property Laws

Legal rulings in Australia, the UK, France and the EU as well as an international investment tribunal ruling, have all confirmed tobacco packaging regulations not breach domestic or international intellectual property (IP) obligations.¹⁴

Disclosed internal tobacco industry documents show that the tobacco companies received legal advice from their own lawyers and from the World Intellectual Property Organization, that plain packaging would not breach international IP obligations because it only controls the use of trademarks and does not prevent registration of trademarks.¹⁵

IP law gives the trademark owner the right to stop others from using the mark but does not give the owner the unfettered right to use the mark. This has been confirmed by national courts, investment tribunals and previous WTO panel rulings.¹⁶

The WTO dispute panel determining the complaint against Australia will soon produce its report and is expected to rule that there is no breach of the TRIPS agreement on intellectual property. The ruling should be available in July 2017. Governments in Australia, UK, France, Ireland, Hungary, and New Zealand have carefully considered their WTO and international obligations and decided to proceed with plain packaging legislation.

INDUSTRY ARGUMENT: It Will Cost Small Retail Businesses by Increasing Transaction Times

 

In Australia, transaction times quickly returned to normal and in some areas decreased because tobacco was put in alphabetical order on shelves making brands easier to identify.¹⁷

PMI and BAT funded retailers in the UK and France to oppose plain packaging.¹⁸

Tobacco retailers oppose all tobacco control laws because they reduce the volume of tobacco sales but this has to be balanced against the huge health and economic benefits that come from less people smoking.

INDUSTRY ARGUMENT: It Will Cause Job Losses in Domestic Tobacco Manufacturing Industries

 

This argument puts tobacco profits before the economic benefits to society. The Economic benefits in reducing smoking rates are huge and far outweigh the costs to the industry.

The Economic Impact Assessment for the UK showed that a 1 percentage point reduction in smoking rates resulting from plain packaging would lead to £25billion net benefit to the economy over 10 years due to reduced health care costs and increased productivity.¹⁹

Reductions in smoking lead to significant health care savings in the short term. A new study from the US showed that a 10% relative drop in smoking (meaning, for instance, a drop from 20% to 18%) would be followed by an expected $63 billion reduction in healthcare expenditure the next year.²⁰

The tobacco industry consistently exaggerate the impact of tobacco control measures on their ability to make profits. In rich economies where smoking rates are falling, tobacco company profits still continue to rise. The companies increase their prices, over and above any tax rises, and so still increase profits.²¹

Money not spent on tobacco by those that have quit is then spent on other goods, generating alternative employment. Studies show that most countries see no net job losses and that a few see net gains if consumption falls.²²

INDUSTRY ARGUMENT: Branding on Packs Only Influences ‘Brand Switching’ and Market Share and Not Smoking Initiation or Overall Consumption

The WHO Framework Convention on Tobacco Control and its guidelines, recognize that tobacco packaging and product design are “important elements of advertising and promotion” and recommends standardized packaging as a “means of eliminating the effects of advertising or promotion on packaging.”

Packaging is recognized as an important component in of the overall marketing strategy for all consumer goods. Tobacco is no exception. Packaging is particularly important for consumer products with a high degree of social visibility, such as cigarettes. Unlike many other consumer products, cigarettes are in packages that are displayed each time the product is used and are often left in public view between uses.

The US Surgeon General summarized evidence in 2012 and 2014 and concluded that: ‘The evidence is sufficient to conclude that advertising and promotional activities by the tobacco companies cause the onset and continuation of smoking among adolescents and young adults.”²³