Plain tobacco packages burns a hole in free market competition


Smoking. It costs NHS England £2 billion a year in smoking-related illnesses; it accounts for a third of all accidental dwelling fire deaths; it costs a 20-a-day smoker £2900 a year, and total household expenditure in the UK on tobacco is around £18.7 billion.

In Scotland, smoking costs around £1.1 billion to the economy every year, and costs NHS Scotland around £271 million for smoking-related illnesses.

All in all, smoking is a massive money making and losing market. The Scottish Government takes about £940 million in tobacco duty, and the UK Government – £9.5 billion, 2 per-cent of the Government’s revenue.

Yesterday, however, the UK Government took another step in making life difficult for the country’s smokers, by voting for a removal of branded cigarette packaging. The same legislation has been in force in Australia since 2012, and is thought to have been behind the 12.2 per-cent annual fall in tobacco sales down under.

The idea of banning branded cigarette packaging is, in some ways, a positive thing. It is arguable that young children may be enticed into buying cigarettes if the packaging is brightly colour, and looks appealing. It is true that around 200,000 11-15 year-olds smoke in the UK, and it is hoped that the proposed olive green packaging will reinforce health warnings to everyone.

In many ways, however, the legislation is completely unfair.

For starters, from this April the laws affecting the display of tobacco will be introduced across the UK, which will ban the display of products and prices. So, already, there are protections in place to prevent young children seeing coloured packages in shops.

I feel sorry for shops in particular over the new laws, as it will be a nightmare organising shelving, and it is likely that there will be mix-ups, and people will end up with the wrong cigarette brands.

More importantly, the banning of branded packaging is completely unfair on the tobacco industry.

Last year a report found the UK was spending £47 billion to deal with the healthcare and social costs brought on through obesity. Obviously, fast food chains are not the only ones to blame for obesity levels, but McDonalds, KFC, Burger King, Dominos – will they be forced to scrap their branding? Of course not.

Then there is one that is perhaps more comparable: alcohol. In 2013-14, NHS England reported that alcohol-related illnesses cost it £3.5 billion a year, and cost society £21 billion a year. Compare that with the figures for smoking, and alcohol costs NHS England £1.5 billion more.

And yet, would you like a Wolfblass with your meal, or a Jacob’s Creek, or a Lindeman’s, or a plain bottle – no branding, nothing.

Meanwhile, online gambling is now a multi-billion pound business, after it passed the £2 billion mark in 2013, with forecasters predicting that the industry is going to keep on growing – even in a time of austerity and economic fluctuations.

As we all know, people end up in massive amounts of debt through gambling; some then become depressed, and turn to the alcohol, tobacco, and junk food, and yet only one of these four industries is getting slammed by plain packaging.


Proposed “design”

What really gets me is the hole this burns in our ideas of a free, and competitive market. Branded packaging allows companies to battle to make the best quality tobacco, and create a customer base.

I am not a supporter of smoking, and yet I can see that smoking does provide the Government with an enormous amount of revenue, and it is (sadly) a human right to choose whether or not to smoke.

If branded packaging is taken away, tobacco companies may last while they have a customer base who are familiar with their brand, and know which ones to ask for. But for anyone new to the market, there will be no options. In the end, it will result in the slow death of the tobacco industry.

Of course, this may be beneficial for health, and for the cost to society generally, but let it be fair. Why should betting companies be allowed to advertise multiple times during advertisement slots; sponsor football leagues; and have their brand plastered over stadiums and race courses? It simply is not fair.


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