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Will changing the collar change the effects?
Legal and marketing effects of plain packages for cigarettes
On the 1st of December 2012, advocates against smoking scored a legal victory with the full adoption and implementation in Australia of the first ever “plain packaging” laws for cigarette packets. With the full operation of the law, all cigarettes in packets will be sold in plain, unadorned packages with significantly conspicuous graphic pictures. The packages will be stripped of any and all corporate logos, brand icons, and advertising promotional texts and even distinct colors. The product as well as the product names will be printed in standardized small fonts with potent warnings that display the gruesome effects of smoking on the consumer (Liberman, 2013 361).
It can be said that tobacco products such as cigarettes are in a “league of their own” in terms of product differentiation; it is the sole product that if used by the consumer as designed, this will inevitably result in the death of the consumer. In the statement of Australian Health and Ageing Minister Jane Holton (2013), the new policy is a “long-term investment in the health of Australians.” The new law, according to Holton, is geared to reduce the number of smokers in the country to at least 10 percent of the population (World Health Organization, 2013 1).
According to research studies, one of the most effective “triggers” for smokers “when to smoke” is the brand on the package. Nicotine “rewards” the smoker with an affirmative, “neurochemical” impulse that become interlocked with the smoker’s nicotine addiction and fuels their need to smoke, a similar situation for addicts to narcotics. In this light, it can be said that there is an extremely potent link with the real system that delivers the “narcotic”- in this light, the brand on the cigarette package. The more visible the cigarette brand is in the market, the higher the possibility that the user will smoke that particular brand as “patrons” are fiercely loyal to that brand. It can be said that branding is a potent mechanism to get people to smoke.
However, the new laws seem to have little impact on sales of cigarettes in the country; cigarette retailers experienced a slight upswing in sales even with the implementation of the new “plain packaging” laws that were specifically designed to deter people from smoking. In the first year of the implementation of the new law, tobacco enterprises sold at least 21 billion cigarettes in the country, according to information of cigarette producer Philip Morris International.
The figures represent a 0.3 percent increase from sales figures a year ago. What is more significant is that the increase stops four consecutive years of declining sales in the country. Nevertheless, there is some evidence the practice is having a slight effect on smokers in the data given by the British Medical Society.
Commissioned by the Victoria Cancer Society, a sample lot of 500 Australian smokers believed that the quality of the cigarettes they were consuming was lower in quality and generally less satisfying, with a rising number of the respondents contemplating on quitting the habit altogether. However, the figures do not indicate retail trade statistics or actual consumption numbers. Furthermore, one research activity commissioned by Philip Morris noted that the use of “plain packaging” on the use of cigarettes by minors did not offer enough data to definitively state that the policy has been effective among smokers in the sector (Reuters, 2014 1).
However, the evidence that is being sought cannot be found as the policy must first be introduced in the international community; at present, that has not yet been done. This sector has constantly proffered the fact that the drab brown-colored packaging has had any noticeable impact, or will make any sort of impact, on the statistics of the number of smokers. Aside from the countries earlier mentioned, other countries opposed to the “plain packaging” policy also include the Netherlands, France, Sweden, Denmark, and the American Congress have all declared their opposition against the policy. In addition, Britain’s health officials have publicly stated that the possible study and adoption of the policy in the country will be shelved. This is due to unresolved issues on matters regarding intellectual property concerns, competition, and intellectual property concerns.
Opponents believe that the unproven and groundbreaking strategy has the possibility of becoming an unprecedented disaster that will cost the taxpayers significant amounts of money. One of the more feared debacles that can happen is the possible exponential growth of the “black market” for cigarettes. In a recent survey done in Australia, illicit tobacco sales grew over the last three years, with the Australian government losing more than $1 billion to criminal syndicates in 2010 alone.
The “black market” for tobacco products in the country is roughly equivalent to 16 percent of the legitimate Australian tobacco market; in a number of Asian and European jurisdictions, the market of illegal tobacco in their respective markets is even twice or even three times that amount.
Criminal syndicates will now have a great opportunity to inundate the Australian market with counterfeit and “loose” cigarettes when all of the packs are of the same dimensions. With a higher amount of cigarettes in the market, the youth will have a higher access rate to purchase the bootlegged products, and with the counterfeit products being sold at half price than the legal product, this can lead to an increase in the number of smokers in the country.
In addition, aside from posits that the implementation of the policy will drag the government into long, drawn out, and extremely costly legal actions. Conservative estimates show that the government will spend at least $10 million in legal costs alone to defend the “plain packaging” policy in court; this amount does not include the possibility that billions will be given out as compensation to the tobacco industry (McIntyre, 2011 1).
In effect, there is a challenge to the utility of the new law. Tobacco corporations have waged an aggressive campaign against the “plain packaging” policy founded on several grounds. However, the challenges posed by the industry against the new Australian laws have been wanting. The High Court rejected all challenges posited by tobacco entities, awarding the costs of litigation to the government.
Additional challenges filed with the World Trade Organization under the ambit of the Australia-Hong Kong Bilateral Treaty are currently pending. The WHO is steadfastly supporting Australia’s benchmark policy, and is closely being observed by other countries such as the United States, France, the United Kingdom, and the members of the European Union (World Health Organization, 2013, 1).
International opposition against the Australian law is being spearheaded by significant tobacco products manufacturers Cuba, Honduras, and the Dominican Republic; these states accuse Australia of adopting a law that essentially attacks their commercial rights. In this light, the groundbreaking legal opposition to “plain packaging” will have wide-ranging effects on the balance that governments need to strike with commercial regulations on one side of the scales and implementing stringent public health policies on the other. The WTO will constitute a three man commission that will be given a six month time frame to determine whether the Australian laws are infringing on the trading rights of other countries.
The final resolution of the issue of the Australian “plain packaging” laws, in the opinion of Boston University School of Public Health professor Michael Siegel, is of such importance since the ruling in the issue will determine the level that nations will be able to implement practical actions designed to safeguard their respective populations without resorting to unfair and prejudiced trading policies.
However, even though there will be the possibility of getting an initial ruling on the issue in a short time, this will not spell the end of the entire affair. The conflict resolution mechanism of the WTO can take years to resolve the issue, and there is also the possibility of appeals, appeals on the appeals, and then there will be the need to develop, refine, implement and then evaluate the implementing processes that were designed to compel the offending state to follow the ruling (Agence France Presse, 2014 1).
If the organization rules against Australia, the WTO has the mandate to allow countries to adopt hostile trade policies to be levied against Sydney. The countries that challenging the law stat that Australia’s “plain packaging” law violate international commerce laws and regulations as well as intellectual property rules. These allegations have been flatly rebuffed by Sydney; in addition, these arguments also were rejected by the Australian High Court in turning down the petitions of the tobacco companies (ABC News, 2014 1).
Whatever the outcome of the legal challenges, balancing trade and health is one of the most difficult endeavors to achieve. Governments must be willing to come to arbitrate between the various stakeholders in the issue and firmly set the direction on whether health or commerce will be the guiding principle in the negotiations. If and when those global leaders will come to terms with the tobacco and health sectors, then it can then proceed to develop policies to balance commercial interests with the government mandate to safeguard the public health.
Bibliography
Agence France Presse, 2014. Challenge to plain tobacco packaging is crucial test for trade rules. The Guardian [online] 4 May, Available at: <http://www.theguardian.com/world/2014/may/04/challenge-australian-tobacco-packaging-critical-test> (Accessed 27 December 2014)
Bittuon, R. 2011. . Should cigarettes be sold in plain packaging? The Sydney Morning Herald [online] 28 May Available at <http://www.smh.com.au/federal-politics/political-opinion/should-cigarettes-be-sold-in-plain-packaging-20110528-1f96b.html>(Accesed 27 December 2014).
Liberman, J., 2013. Plainly constitutional: the upholding of plain tobacco packaging by the High Court of Australia. American Journal of Law and Medicine [online] Available at<http://www.mccabecentre.org/downloads/Liberman_plainly_constitutional_FINAL.pdf> (Accessed 27 December 2014)
McIntyre, S. 2011. Should cigarettes be sold in plain packaging? The Sydney Morning Herald [online] 28 May Available at <http://www.smh.com.au/federal-politics/political-opinion/should-cigarettes-be-sold-in-plain-packaging-20110528-1f96b.html>(Accesed 27 December 2014).
Reuters, 2014. Australia tobacco sales increase despite plain packaging. The Guardian [online] Available at<http://www.telegraph.co.uk/news/worldnews/australiaandthepacific/australia/10718244/Australia-tobacco-sales-increase-despite-plain-packaging.html> (Accessed 27 December 2014)
World Health Organization., 2013. Reducing the appeal of smoking-first experiences with Australia’s plain tobacco packaging law. Available at<http://www.who.int/features/2013/australia_tobacco_packaging/en/> (Accessed 27 December 2014).
