From: The Telegraph
The lessons from Australia are clear: plain cigarette packs may are a dream come true for the counterfeiters and may not even reduce smoking
By Christopher Snowdon
So much for evidence. With every indicator showing that plain packaging in Australia has been, at best, a damp squib, the campaign for this risible policy was won with the one oft-repeated question: “Why would the tobacco industry spend so much time and money lobbying against plain packaging if it didn’t work?”
Like all rhetorical questions, it is supposed to answer itself: “Because they know that plain packs will deter people from smoking, stupid.” The answer is clear, simple and wrong because it confuses profit with volume. Profit margins are bigger on premium brands, which is why big cigarette brands – just the brands, not the cigarettes – are worth billions. Get rid of the branding and many smokers will turn to cheaper brands which have tighter margins.
Then there is the problem of counterfeit and smuggled cigarettes. Illicit tobacco is widely available in the UK, costing the exchequer around £2 billion in lost revenue, and there has been a sharp increase in contraband tobacco in Australia since plain packaging was introduced. It is worth reflecting on the changing nature of Australia’s black market since we are likely to see a similar phenomenon in Britain quite soon. When the Australian law came into effect, many people, including myself, expected counterfeiters to mass produce ‘plain’ cigarette packs. A few did, but the main trend was towards completely fake brands with all-singing, all-dancing pack designs. These brands have never existed as legitimate products in Australia. One of them, known as ‘Manchester’, came from nowhere to gain a 1.5 per cent market share despite being an obvious fake. It seems that many smokers dislike the plain packs, as was the intention, and are prepared to turn to the black market for a more retro look. Conventional packs have become status symbols.