Still more battles to fight on plain packaging

In spite of the Australian judgement in favour of plain packaging, there are more battles to be fought.

The UK campaign goes on, as do battles in the World Trade Organization.

Simon Chapman, prime supporter in Sydney comments here (admitting the first result will be a price war, to which the government's response will be to raise the tax). He outlines outstanding challenges to the display ban in Australia, and interestingly describes these greedy capitalist tobacco corporations as 'global minnows' in their fight against plain packaging.

A branding expert Stephen Cheliotis, comments here, from the other side of the argument.

Both sides have comments below, as does the BBC report.

Views vary depending where you read them. Sadly there are people who feel that the opposition of tobacco companies to plain packaging must mean that the policy is sound and will have its desired effect. The less mannerly accuse anyone who disagrees with this position of being in bed with tobacco. This is ad hominem argument (usually quite without foundation) and doesn't really help anyone to understand the issue.

The Australian government's attempts to confiscate the intellectual property of branding should be illegal: they  have confiscated something of value without compensating the owners. Arguing that they are not actually using the branding doesn't cut it – especially now admitting that the Treasury expects to recoup extra tax revenue as a direct result of the change in law.

Observer continues plain packaging media attack

The Observer reports that the American Legislative Exchange Council (ALEC) opposes plain packaging, and plans a global campaign against it.

Many readers of the article took this as a piece exposing how powerful capital interests (they fund the Tea Party, for goodness' sake!) influence UK policy. My take on it was that this was a piece trying to evoke the sense that if ALEC disagrees with it, then it must be an ideologically sound policy, on the grounds that my enemy's enemy is my friend.

I have not investigated ALEC. The detail of their purposes doesn't concern me, and is not relevant in any case to the advisability of the plain packaging policy. What is relevant is that they are US-based but wish to campaign beyond the US:

The organisation's attempts to influence the debate outside its native US has angered health campaigners. "Alec's free-market rhetoric may work in the US but it won't wash here in the UK," said Deborah Arnott, chief executive of Action on Smoking and Health (Ash). "The tobacco industry and its lobbyists have money to burn, and they might as well just set fire to it as their campaign against plain packs is going nowhere. Their legal case is weak and the evidence in support of plain packaging is strong."

Money to burn? I wonder what keeps her movement afloat when the nation's hospitals are physically falling apart? And what makes Arnott think that this is not an international issue? Why should anyone limit their campaigns to a single country when the World Health Organisation advocates this policy globally and the companies affected also operate internationally?

Brand packaging exists to protect the commercial operator from threats in the marketplace, like cheap imitations; and also to protect the consumer from the effects of such copying. Removing it, especially for a product that is already strong in the black market, popular especially among the economically deprived and considered to be hazardous, is surely asking for trouble. I don't see why you have to be a 'right-wing libertarian nut-case' to find this idea sensible.

The Observer's piece, linking this organisation in a quotation from Greenpeace to 'climate change denialists', is a blatant attempt to cast its view of the current issue as wrong, because all the other idiot causes it espouses are wrong (also chucking in words like 'billionaire', 'baron', 'oil'). It's hardly a subtle approach that investigates the controversy properly. The less affluent opponents of the policy don't get a mention (people like newsagents).

Observer goes to the bottom of the class, for reporting very unobservantly.

ASH Scotland: polite disagreement over plain packaging

Admittedly the Scotsman's reasoning was a little flawed in this report, which begins:

POLICE fear smuggling counterfeit cigarettes could become easier if the Scottish Government introduces plain packaging as a way of tackling smoking.

and continues:

However, they stopped short of saying it will trigger an increase, saying there is no hard evidence to support that. [emphasis added, here and above] 

It is not credible to suppose that if conditions for smugglers are made easier, they will not increase their activities. This is wayward report writing, and Sheila Duffy is right (to some extent) to be critical of it. If all the police say is that plain packaging will not put smugglers off, the headline of a report on the police view should not say that plain packaging is a 'smugglers' charter'. The report goes on:

It follows a poll of England and Wales officers which found that almost nine out of ten believed the change would lead to a rise in smuggling and counterfeit packets.

“It is likely that the production of counterfeit cigarettes will probably be made easier by less attention to packaging, and by that logic those already involved will probably seek to continue,” the SCDEA said.

As if anyone imagined that the introduction of plain packaging would persuade anyone to stop smugglers' involvement in the trade. This seems a very cautious assessment from the Scottish Crime and Drug Enforcement Agency.

ASH Scotland has taken initiatives in fighting illicit tobacco in the past, such as organising this conference in 2010, in which SCDEA participated. (It seems necessary in terms of their PR to be seen to care about the impact of illicit tobacco in the light of their policies; but it also seems a little disingenuous since they don't want people to use the genuine article either. They won't tell people to support their local shop, or to buy genuine tobacco rather than fund criminals in the black market.)

Sheila Duffy offers a resoundingly ineffective argument to counter the assumption that plain packaging will increase smuggling:

That this represents a “smuggler’s charter”, as your headline suggests, is also a well-worn yet unfounded response by the tobacco industry. Enforcement officers use hidden markings that are hard to copy to check whether packs are illicit.

After threatening tobacco smugglers with hidden markings that can be detected only by equipment that is used by enforcement officers, she then goes on to discuss penalties for smuggling and promoting her organisation's policies more generally. She has said actually nothing to suggest that the 'hidden markings' on brand packaging will stop smugglers from taking advantage of the removal of brand packaging.

Honduras joins Ukraine in WTO protest against plain packaging

So far only two countries have decided to challenge Australia's plain packaging law.

"Australia's plain packaging requirements would defeat the basic function of a trademark, which is to allow consumers to distinguish between products of different companies," Castillo [Honduras WTO ambassador] said in a statement.

May the movement grow. Trademarks and brand design are essential to regulated trade. If authorities can make one excuse to ban them, they can come up with further excuses.

US Chamber of Commerce and others issue statement opposing plain packaging

Major business interests in Washington have issued an important statement on the implications of Australia's plain packaging policy, and expressed their opposition to this policy.

Although many people appear to feel that the tobacco industry's indignation about plain packaging demonstrates how important plain packaging is in the fight against tobacco, it would appear that the tobacco industry is not alone in its concern for intellectual property in general and the likely benefits to rogue tobacco traders. Two extracts:

However, plain packaging risks establishing a precedent of intellectual property destruction for an entire industry through government mandate that would be very damaging to the legitimate interests of trademark owners to associate their brands with their products, a fundamental protection under trademark law

and:

Moreover, we have genuine concerns that plain packaging will incentivize further the already growing incidence of counterfeit, smuggled and other illicitly traded goods being sold in Australia. There can be little question that plain packaging will make it easier for contraband or counterfeit products to enter the market. This will augment the inevitable downward pressure on prices of legally sold goods when brands are undermined and the market moves toward commoditization. The economic incentives to avoid the legal system will overwhelm any enforcement effort detailed in the legislation. As a country that has supported the Anti-Counterfeiting Trade Agreement (ACTA), Australia should be particularly concerned about these consequences.

 Simon Chapman, professor of public health at the University of Sydney, tries to explain how plain packaging will indubitably help. I find his logic hard to follow:

Profitability in the tobacco industry today rests largely on high-priced premium brands, which are able to attract higher retail prices purely on the strength of branding and pack image. If all packs will look the same, many smokers will wonder why they should shell out far more for a pack that looks the same as every other brand except for brand name and that internal tobacco industry research shows cannot be distinguished from cheaper brands in blinded smoking experiments. The illusion that premium brands are “better” will evaporate, and much profitability with it.

The result of this will surely be falling prices – not an outcome advocated by anti-tobacco activists in general. Chapman is confident that Australia is on top of illicit tobacco, but while it is true that Australia is less exposed than Canada, for example, there is still an issue with illicit tobacco and those involved tend to have an opportunistic streak that would likely be excited by a legitimate-industry-busting initiative like plain packaging.

The Chamber of Commerce and its allies in this statement have made an important case. Brand protection is a guard against cheap imitation, and health authorities that were really interested in health would not attempt to destroy it. Insofar as it represents an attack on intellectual property, the proposed plain packing measure is a dangerous precedent that threatens the benefits of brand packaging not just for tobacco but for any other line of products. Legality brings with it rights and obligations, and brand protection should not be removed from tobacco – or why did we ever bother with it in the first place?

Retailers unite against European tobacco restrictions

Retail representatives of eleven European nations including the UK's National Federation of Retail Newsagents have met in Brussels to demonstrate joint opposition to restrictions on tobacco.

The revisions follow 'an EC "consultation"' that took place in 2010: the questions offered the possibility that EU member states should be allowed to legislate for themselves on tobacco control issues. The Commission's decision to pursue policies and restrictions throughout Europe gives its opponents a strong motivation to join forces.

Arguments will be dismissed as the work of tobacco company propaganda – just as licensees up and down the country who watched their takings plummet following the smoking ban were told that 'the recession' was to blame for their struggling trade.

"These measures will mean huge costs for retailers along with an explosion of the black market, presenting a threat to more than half a million small retail businesses in the EU," said Giovanni Risso, chairman of the European Confederation of Tobacco Retailers which hosted the Brussels meeting.

The retailers say existing legislation has already forced business closures, thanks to the rise in the smuggling of cheaper illegal cigarettes. Now they say standardised packaging would make products even easier to counterfeit - and banning the more addictive ingredients in tobacco would trigger an illicit market in stronger cigarettes.

They are persuaded that this approach to tobacco will make legitimate sales harder without reducing the demand for the product, and that illegal traders will reap the benefits. It is hard to see how further restrictions in the legal trade in tobacco can fail to benefit rogue traders.

The proposals mimic the Australian unbranded packaging model. A popular argument claims that the branding must be worth sales to tobacco companies, since the threat of its removal has provoked them into a reaction. But it's not that simple: brand identity is important in the marketplace to protect against cheap imitation, and on health grounds alone you would think that distinctive brand-packaging would win the support of the so-called 'health lobby'. Even an Australian anti-smoker has been won over on the argument that government has no right to tamper with the brands of legally traded products.

This legislation will see the potential destruction of brands that have been legally built up over many years. Quite simply, this puts the spotlight squarely where it should be. This is a debate about the freedom of the marketplace, and the boundaries of government restrictions to legal trade. The government, in my opinion, has no right whatsoever to actively seek the destruction of brands that are legally traded in the marketplace. Yes, it has every right to persuade people to choose not to smoke. And it has a duty to publicise the health risks of smoking, if for no other reason than relieving the pressure on the public purse of the exorbitant costs of treatment ... 

I wish the traders from these eleven European countries a productive association. Their case is compelling.