Plain packaging: a failed policy export

We all know plain packaging is incredibly unappealing to look at, but statistics are consistently showing that it is also completely useless – and may even have effects that go against its intended outcome of reducing smoking. 

First, some background. Since December 2012, all companies selling tobacco products in Australia have been required to remove any branding or logos on packaging under the Tobacco Plain Packaging Act 2011. This has meant that all products from all brands have same appearance – drab dark brown (or Pantone 448 C, “the ugliest colour in the world”). The drab packaging compliments enlarged pictures of a child dying from cancer, somebody’s rotten teeth, a gangrenous foot, or some other visceral and confronting medical image designed to scare people into giving up the habit.

Australia was the first country to implement standardised tobacco packaging laws, and has inspired at least 15 other countries to follow suit. The UK, France, New Zealand, Norway, Ireland and now Canada have all implemented plain packaging requirements.

The UK government is now considering the idea of going even further by applying plain packaging to confectionary products and snack foods like potato chips and chocolate in order to combat rising childhood obesity rates.

Nanny state lobbyists and social engineers prioritise public health over individual liberty and responsibility. This line of thinking means that it’s certainly worth forcing producers of undesirable products to denounce their own goods constantly in order to create a more healthy and virtuous society. Those who take the position that common people are too ignorant to recognise their own vices would naturally be drawn to plain packaging laws. The problem is, they don’t actually work.

Smoking rates have long declined in the west as the habit’s dangers have become widely known. The Institute of Health and Welfare has been surveying people on their tobacco usage habits tri-annually in their National Drug Strategy Household Survey.  The data gathered over the years was recorded and published in this document.

According to Table 2.1 on page 16, between 2001 and 2013 the percentage of people that consider themselves current smokers has declined at an average rate of 1.85% per three-year interval, and daily smokersby 1.68%. However, the decline between 2013 (just after the implementation of plain packaging laws) and 2016 was a mere 0.9% and 0.6% for current and daily smokers respectively; not just lower than the previous average rate, but less than half.

I have created these graphs to demonstrate the difference between what would have happened if the decline had continued on the original trend, and the actual results.

If the objective of the policy was to improve public health by decreasing the number of smokers, then it did absolutely nothing in the best case scenario. In the worst case, it may have even hurt the progress that was already being made.

This leads to the obvious question: how is it that plain packaging could potentially lead to an increase in consumption?

According to this article from 2014 by The Guardian, consumers are finding it harder to tell different brands apart in taste tests without the unique packaging. Without the perception of higher-cost brands being of a higher quality, cigarettes effectively become a commodity – quantity for price becomes a more important consideration than perceived quality, and lower cost products tend to be consumed at a higher rate. Since “premium” branded products are no longer available, some smokers may even prefer to purchase illegal cigarettes on the black market due to their even greater quantity to price ratio.

It follows then that applying this policy to junk food or alcohol could have the exact same effect. Consumers will just tend towards buying the cheapest possible bar of chocolate, bag of chips or bottle of vodka that they can get. Ruskov and Grey Goose both taste like hand sanitizer, so you may as well go for the cheaper option –  especially since you’re not going to impress anyone with a generic bottle decorated with a picture of a person throwing up or a traffic fatality. In turn, Australian small and regional business, including innovative brewers, winemakers and distillers as well as the workers they employ, will suffer most. Brand Finance estimates that if plain packaging were applied to the global beverage industry, then the loss in economic value could exceed $250 billion USD.

Australia and the rest of the world should learn from the failure of plain packaging. No honest person could look at the statistics and believe that the policy has been a success.

Jack Johnstone

Jack Johnstone is a Research Associate with the Australian Taxpayers’ Alliance.
Jack Johnstone

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