A JTI-Macdonald Corp. Initiative. (It’s always best to see both sides.)
(It’s always best to see both sides.) A JTI-Macdonald Corp. Initiative.

JTI’s response to Health Canada’s plain packaging consultation

Following the publication of Health Canada’s “Consultation on ‘Plain and Standardized Packaging’ for Tobacco Products”, JTI prepared a response.

This official response outlined, clearly and unequivocally, why we believe that the plain packaging policy is ill-considered, will infringe our legal rights as a company while failing to achieve public health benefits, and lead to an increase in criminal activity through the illegal trade of tobacco products.

EXECUTIVE SUMMARY

Plain packaging would deprive us of the value of our brands – our most valuable assets. Without reducing smoking, it would damage our ability to compete, would violate adult smokers’ rights to receive product information and would increase the already thriving illegal tobacco market in Canada. Plain packaging will infringe our legal rights without achieving public health benefits.

The actual data from Australia, the first country to introduce plain packaging, reveals that this is a failed policy in respect of which everyone (except criminals) loses.

Consultation-submission-from-JTi_Still-of-report-front-cover

Plain packaging does not work: the evidence and experience in Australia

  • Health Canada has not shown that plain packaging will (or is likely to) cause a further reduction in smoking, including by minors.
  • Figures from Australian government agencies show that plain packaging has done nothing to speed up the decline in smoking rates or to reduce further sales of tobacco. More underage Australians were smoking on a daily basis after the rules on plain packaging came into effect in Australia than before. This has been recognized by the UK in its plain packaging impact assessment, which reports that: “The daily prevalence rate for 12 to 17 year olds [in Australia] rose from 2.5% to 3.4% between 2010 and 2013”.
  • Conversely, the experience from Australia does show that plain packaging: damages brands and competition; confuses retailers and smokers; and reduces government tax revenues by accelerating further downtrading (as existing smokers switch to cheaper lawful brands, or in some cases to the cheapest illegal tobacco brands).
  • The out-of-date and flawed consumer research relied upon by Health Canada also fails to show that plain packaging would work here.
  • Plain packaging does not work because packaging does not cause people to smoke.

Plain packaging will boost the illegal trade

  • A ban on branding means consumers simply look for the cheapest product available. For many Canadians, this is tobacco from illegal sources.
  • In Australia, an island without Canada’s pre-existing illegal tobacco problem, the illegal market has grown by more than 20% since plain packaging. The number of cigarette seizures has increased by over 41%.
  • Illegal cigarettes represent approximately 18% of the total domestic market in Canada. These cigarettes are sold at one-tenth the price of legitimate brands, fund the illegal activities of more than 170 criminal gangs, are easily available to minors and deprive the government of much-needed tax revenue.
  • In a plain pack environment, illegal producers will benefit at the expense of legitimate industry. They would be able to replicate easily plain packs and continue to supply the Canadian market with illegal branded packs and clear plastic baggies of cigarettes without health warnings.

Plain packaging deprives adult smokers of product information

  • Tobacco is a legal product. Adults who choose to smoke are entitled to be treated fairly, and have the right to choose and obtain information about the product they prefer. Plain packaging makes it harder for consumers to distinguish between brands and to decide which brand to buy.
  • We invest in packaging in order to compete with other products available to existing adult smokers. The ability to distinguish our products through packaging is a key means by which we communicate with consumers and they are able to exercise freely economic rights of purchase. Branded packaging also enables us to guarantee the quality of our products.
  • This is of increased importance in the Canadian context as our ability to communicate to existing adult smokers is severely hindered by retail display bans and the federal government having unlawfully taken 75% of the front and back of our packs for their communications to smokers.

A threat to intellectual property and investment

  • Plain packaging will severely and permanently damage some of our most valuable assets – our trade marks – by banning them where they really matter – on our packs. It unjustifiably infringes our fundamental legal rights.
  • Our view that plain packaging is unlawful will come as no surprise to Health Canada, which previously decided not to introduce a branding ban “based on the best legal advice”. The federal government has previously passed legislation to protect the use on packs of some of the very trade marks which it would now be banning.
  • Plain packaging sets a precedent for unjustifiably interfering with consumers’ freedom for other products (a concern reinforced by recent reports that the Ontario Medical Association has mocked up images of plain packaging on food and drink products).

There are more effective alternatives

  • There is still work which can be done to prevent youth smoking. In this consultation response, we set out alternatives which we consider should have formed part of the current consultation:
    • Taking stronger action against illegal traffickers who make tobacco easily accessible to minors at lunch-money prices.
    • Federal measures to prohibit the possession of tobacco products by minors.
    • Reinforcing smoking-related messaging to minors.
    • Refreshing current health warnings’ content and increasing the prominence of quit line information.
    • Better enforcement of existing laws preventing any “misleading” elements of tobacco packaging/products.
  • It is these alternatives, and not plain packaging, which Canada should progress to reduce further smoking by minors and, in particular, their access to illegal, unregulated tobacco products.

A consultation in name only

  • Consultation should mean real consultation. We are deeply concerned that plain packaging is being forced through in Canada, relying on so-called evidence from full-time supporters of this policy. For some of the measures being proposed, the consultation is no more than a one-sided call for evidence.
  • A poll conducted by Forum Research in the last month of the consultation reveals that fewer than 1 in 10 Canadians understood what it was about. Fewer than 1 in 5 Canadians had even heard about it.
  • Instead of considering plain packaging with an open mind, the steps now being taken are essentially part of efforts to validate views already held and wrongly looking only at one side, not both sides, of the argument.
  • This creates a dangerous precedent that should be of concern to Canadians generally, but particularly brand owners.
  • In the context of this consultation, “evidence-based decision-making” can lead to only one rational conclusion: not to move ahead with this failed policy, but to look to other measures to combat smoking by minors.

Supporting information

As part of our response, research was commissioned around adolescent decision-making and whether standardized packaging would reduce underage smoking1.

Further research that supported our response looked at analysis of the Chipty Report’s conclusions regarding packaging changes and smoking prevalence in Australia2.

You can read our response to the consultation in full, here


1 Steinberg, L. (2016). Adolescent decision-making and whether standardized packaging would reduce underage smoking. Temple University. Available at: Click here to view Last retrieved: 7 September 2016

2 Lilco, A. (2016). Analysis of the Chipty Report’s conclusions regarding packaging changes and smoking prevalence in Australia. Europe Economics. Available at: Click here to view Last retrieved: 7 September 2016

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