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.

Plain packaging destined to fail says Institute of Economic Affairs

A leading UK economic think-tank, the Institute of Economic Affairs (IEA), has reported that the plain packaging policy recently made law in the United Kingdom is destined to fail1.

Citing the experience of plain packaging being introduced into Australia, the IEA notes that it has had no impact  when compared to both the general trends in smoking rates and the impact of the huge tax increase on tobacco that came into force in 2013. From the introduction of plain packaging until the tax hike, consumption of tobacco actually appeared to be rising, as this graph from City AM shows2.

 

Will it change the behaviour of smokers in the way policymakers want? The IEA believes that because price will become the primary differentiator within the market, it will change behaviour in an unexpected way:

“The logic of plain packaging is to reduce the appeal of smoking through unattractive packs and unsightly health warnings. But the outcome of all this may be for smokers to alter their habits, rather than ditching them altogether.”2

Another feature of plain packaging in Australia has been the rise in contraband cigarettes, a point that the IEA makes clear in its conclusion:

“It could well be that the overall size of the market will shrink – the size of the legal market, that is. But if Australia’s experience is anything to go by, it won’t take long before smugglers and counterfeiters will fill that gap.”

Read the article from the Institute of Economic Affairs here.

Does Health Canada’s stance on plain packaging seem right to you? If you think there needs to be more evidence, debate and consideration given to such a policy, contact your local MP.

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1 Grant, M. (2016). Economic theory – and common sense – suggest that plain cigarette packaging won’t work. Institute of Economic Affairs. Click here to view Last accessed 29 September 2016

2 Washtell, F. (2016). This one chart shows the impact plain packaging laws had on cigarette sales in Australia (spoiler: it wasn’t much). City A.M. Click here to view Last accessed 29 September 2016

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