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New Evidence: Plain Packaging Drives Up Tobacco Sales in Australia

New Evidence: Plain Packaging Drives Up Tobacco Sales in Australia

New evidence has emerged showing a marked increase in youth smoking and tobacco smuggling rates in Australia, following the introduction of plain packaging two years ago. Remarkably, the volume of cigarettes sold also went up for the first time in decades. Despite the damning evidence, anti-smoking campaigners have claimed victory with the measure, calling for it to be introduced in the UK.

Plain packaging was introduced in Australia on December 1 2012, and placed all control over tobacco product packaging into the hands of the government. The legislation banned the use of all branding, colours or trademarks, replacing the lot with disturbing images and dire health warnings. The name of the brand is also displayed in standardised text.  

Two years on, the Australian Institute for Health and Welfare has analysed the real world evidence to quantify the effects that the policy has had. They found that youth smoking rates increased by 36 percent in the period 2010-2013. Illicit sales also increased, from 11.5 percent of the market in 2011, to 14.3 percent by mid-2014, an increase of nearly 25 percent.

From the anti-tobacco lobby’s point of view, the most damning evidence against plain packaging ought to be the effect it had on sales. Since the 1970s, tobacco consumption has been in long term decline. The only exception to this trend was seen in the last three quarters of 2013, in which sales exceeded those in the last quarter before plain packaging was introduced. The rise in sales was eventually halted by a 12.5 percent tax rise on tobacco introduced in December 2013.

Faced with these figures, the authors of a study published in the Australian National University’s journal Agenda were forced to conclude “Ronald Coase famously argued that if you tortured the data long enough they would confess. In this paper we have tortured the data, but there has been no confession.

“While we do not want to over-emphasise these results, we do conclude that any evidence to suggest that the plain packaging policy has reduced household expenditure on tobacco is simply lacking.”

Yet, inexplicably, anti-tobacco campaigners have hailed the introduction of plain packaging as a success. Sarah Woolnough, executive director of policy and information for Cancer Research UK said “This is an anniversary worth celebrating. Australia took the lead on this issue and two years later they’re reaping the rewards.

“Smoking rates have fallen, more people than ever support standard packs and scare stories about flooding the market with cheap, illegal tobacco have failed to materialise. It’s been a resounding success in Australia and we’re confident the same can happen here.

“Research has shown that removing the colourful designs of tobacco packs reduces the appeal of smoking to children. This measure will help cut the number of people killed by smoking and we’re urging the UK government to take the next steps as soon as possible.”

Commenting on the findings, Christopher Snowdon, Director of Lifestyle Economics at the Institute of Economic Affairs said “The policy of plain packaging is based on the belief that people start smoking as a direct result of seeing logos and colour schemes on cigarette packs. If that belief is ill-founded (as any smoker will tell you it is) then it is no surprise that plain packaging has failed to have even a slight impact on smoking rates.

“Plain packaging is one of a number of extreme anti-market measures proposed by the ‘public health’ lobby to hand the control of levers of competition to the state. The fact that plain packaging, like minimum pricing, is at the centre of major trade disputes is an indication of its threat to the workings of the free market.

“A market in which the government dictates what a product should look like, how much it should cost and what size it can be is barely a market at all. Smokers and the tobacco industry are often used as guinea pigs for draconian new legislation, but with the clamour for plain packaging to be extended to food and alcohol growing louder, its conspicuous failure in the only country to have tried it needs to be understood.”

Meanwhile back in Australia, a prominent anti-smoking campaigner, Melanie Wakefield of the Centre for Behavioural Research in Cancer has been engaged without tender by Australia’s Department of Health to conduct to undertake a National Tracking Survey of 400 current and ex-smokers between 2012 and 2014 to assess the effectiveness of the plain packaging laws.

She has been handed a budget of AUS $3 million in order to do so, which comes on top of another AUS $7million that her department has received in federal funding over the last decade.

Philip Morris Limited Director of Corporate Affairs, Chris Argent, said “This is akin to a student setting the end of year exam questions, taking the test and then marking their own work.”

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