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Plain Packaging for Cigarettes Epitomises Policy Made on the Back of a Fag Packet

01/07/2014 13:04 BST | Updated 20/08/2014 10:59 BST

Given the lack of evidence and the unintended consequences which may arise due to homogenous cigarette packaging, it is imperative the government finally stubs out this misguided policy.

Currently, Australia is the only country to implement statute-bound plain packaging for cigarettes, and the results indicate it would be unwise for the UK to follow Australia in their experimentation if their aim is to cut smoking levels.

The Retail World supermarket sales data from Australia indicates that sales of "mainstream" and "premium" cigarettes fell by 8-9%, whilst sales of "value" brands rose by 12.9%. Meanwhile, overall tobacco sales increased by 0.3%, a vast discrepancy compared with the 15% decline in sales over the last four years. This evidence alone indicates the government must at least support a hiatus on the plain-packaging legislation, given its unintended consequences. Other potential consequences include contravening free trade obligations (the legislation is currently involved in a case with the WTO) and deprivation of its intellectual property rights; tobacco company Philip Morris is currently challenging the legislation.

The logic almost seems too simplistic: colourful, shiny packaging encapsulates naive teenagers and encourages them to suddenly form a deep-seated tobacco addiction, therefore replacing the branding with gory images of the consequences of smoking will deter any potential addicts to be. This logic is, however, fundamentally flawed. If firms cannot compete on branding and differentiate their product through advertising, companies will be forced to compete on price, thus incentivising smoking through lower prices. Furthermore, the absence of branding perversely encourages smoking as consumers will no longer seek more expensive cigarettes which were previously branded, thus consumers will be content with the cheapest tobacco and can afford more of it. This has been the case: alongside the increase in sales of "value" tobacco, the sales of loose tobacco have increase by 3.4% as consumers no longer seek more expensive, branded cigarettes which would limit their consumption as they could afford less tobacco.

Plain packaging fails to reduce the volume of smoking, alongside exacerbating illicit tobacco trade and counterfeits. A KPMG study published in October 2013, entitled Illicit Tobacco, concluded that plain packaging was ineffective in terms of reducing tobacco consumption in Australia. Furthermore, and more worryingly, it associated homogenised tobacco packaging with record levels of illicit tobacco consumption, increasing from 11.8% to 13.3% from June 2012 to June 2013. The 2.5% increase in unlicensed tobacco trade in the year since plain packaging was introduced in Australia represents a loss of AUD $1.0bn in tax revenue. Ironically, the larger the government intervention, the more the regulated market becomes compromised by an illicit and unregulated industry.

The effects of the nanny state are not solely confined to smoking: UK trading officers estimate sales of illegal alcohol increased by 500% since 2009 due to increased alcohol duty. All the evidence suggests more government is not the answer: the larger the scale of state intervention, the larger the unintended consequences. Demonising smokers further is not the solution, nor is bureaucrats, politicians and the health lobby legislating on every aspect of people's lives.