BAT WCA - Packaging Changes

Plain Packaging, Graphic Health Warning, Branding Rights, etc.

One of the main reasons why we are against plain packaging of tobacco products is because we believe it is not an effective way of reducing smoking levels. Some people think that the colours, designs and trademarks used on cigarette packs make them more appealing, particularly to young people but there is no compelling evidence to suggest that plain packs or graphic health warnings are effective in discouraging young people from smoking, encouraging existing smokers to quit or preventing quitters from taking up smoking again.

In December 2012, Australia became the first country to introduce plain packaging. After five years, it is clear that plain packaging is not achieving its primary policy objective of reducing smoking incidence. The Australian Government’s own data shows no significant decline in the Australian smoking rate between 2013 and 2016. This is the first time in over two decades that no statistically significant decline was recorded. There has, however, been a significant increase in the size of the illegal tobacco market – the criminals behind this illegal trade are now profiting at the expense of Australian taxpayers, with the Government losing around AUS$1.6 billion in tax revenue annually. We believe there are more effective ways of addressing smoking rates, such as targeted youth anti-smoking programmes and better enforcement of existing laws governing the sale of products to young people.

Another important reason why we oppose plain packaging is that we consider it to be unlawful. This is because it involves governments taking property from businesses – in this case our trademarks and other intellectual property – without paying for it. That is illegal under the laws of many countries around the world.

A properly functioning consumer goods market relies on having clearly differentiated brands with different quality and price positioning. These differentiating features are all provided by brand trademarks, which enable existing adult smokers to differentiate between brands. Trademarks and branding also provide quality assurance for consumers and retailers – plain packaging removes this assurance.

International trade law requires countries to respect and protect trademarks, which is why four countries – Cuba, Honduras, the Dominican Republic and Indonesia – are challenging Australia’s plain packaging laws before the World Trade Organization. Decisions in one country do not, however, set a precedent for other governments to introduce plain packaging. No two jurisdictions are the same and any government considering plain packaging will need to ensure that it complies with the fundamental rights of businesses, as protected both by the laws of that country and internationally, while also being mindful of the ongoing World Trade Organization dispute on plain packaging.

Consultations and reports

Report on the effect of Australian Plain Packaging and graphic health warnings on smoking prevalence

A recent expert report authored by Professor Kip Viscusi analyses the impact of plain packaging in Australia. The analysis looks at data from January 2001 to December 2016, a longer time period than any other publication studying the impacts of plain packaging in Australia. Professor Viscusi concludes that the tobacco packaging changes introduced in Australia in 2012, which included plain packaging and enlarged graphic health warnings on tobacco packaging, have had a zero effect on smoking prevalence rates in Australia. The report further considers the analyses of the RMSS dataset, previously analysed by Dr Chipty which is relied upon in the Australian Post Implementation Review of Plain Packaging.