Monday, 24 November 2014

Plain packaging had no effect on sales - new study

A study published in the Australian National University's journal Agenda examines the government's official sales figures for tobacco before and after the introduction of plain packaging and finds no evidence that the policy had any effect.

Despite our econometric efforts, the data refused to yield any indication this policy has been successful; there is no empirical evidence to support the notion that the plain packaging policy has resulted in lower household expenditure on tobacco than there otherwise would have been. There is some faint evidence to suggest, ceteris paribus, household expenditure on tobacco increased.

This will come as no surprise to readers who have seen the Australian Bureau of Statistics' data laid out on a graph. It is as clear as a bell that the secular decline in tobacco sales came to a virtual halt in the first year of plain packaging. No amount of sophistry and statistical jiggery-pokery can alter that (although there will no doubt be plenty of both in Simple Simon's new book).

The study - by Davidson and de Silva - tests the data from every angle and discusses plausible mechanisms whereby sales could rise or fall as a result of plain packaging. Ultimately, however, they come out empty handed:

Ronald Coase famously argued that if you tortured the data long enough they would confess. In this paper we have tortured the data, but there has been no confession. At best, we can determine the plain packaging policy introduced in December 2012 has not reduced household expenditure of tobacco once we control for price effects, or the long-term decline of tobacco expenditure, or even the latent attributes of the data.

To the contrary, we are able to find a suggestion that household expenditure of tobacco has, ceteris paribus, increased. In our forecasting exercise the actual data come close to breaking through the 80 per cent confidence interval. While we do not want to over-emphasise these results, we do conclude that any evidence to suggest that the plain packaging policy has reduced household expenditure on tobacco is simply lacking.

Can we say 'we told you so' now?

As the truth begins to sink in that plain packaging has been a flop, the tobacco control industry is looking for new ways to justify their existence. Nearly two years ago, I asked the question:

What fresh lunacy will follow? Warnings on individual cigarettes? Smoking licences? All out prohibition?

Smoking licences and all out prohibition have already been mooted and this shamelessly partisan puff piece from the BBC's superfluous 'magazine' section gives an indication of which part of the barrel is going to be scraped next:

Moodie is the last person to underestimate the tobacco companies. Their flair for innovation, and the sheer size of their budgets makes it "very hard for public health to compete," he says.

He adds: "While tobacco companies exploit the entire cigarette pack, including the cigarette, as a sophisticated communications tool, policy makers are less creative [cigarette design hasn't changed one iota since filters were invented in the 1930s - CJS]."

The same techniques the tobacco companies use to attract consumers should be used by governments to dissuade them from smoking, he argues. Since the companies stamp their brand name on each cigarette, he asks, why not put a health warning there too?

He has even mocked up an example of a cigarette carrying the words "Smoking kills".

Watch this space.

Watch this space indeed. That should keep the grants rolling in for another couple of years.


Christopher Snowdon said...

I imagine that there's been an increase in cigarette cases sales because of plain packaging. On a different note, I find that 'Australia's smoking war' from the BBC piece interesting. In just 25 years, from 1987 to 2012 they've gone completely bonkers.

Christopher Snowdon said...

Perhaps this is why SC has decided to take a years break :

Maybe he wants to avoid all the public displaying of the egg all over his face.

Run away Simon, run away, you've been exposed, so run away!

Christopher Snowdon said...

Is there any chance that he might keep running until he drops?

Christopher Snowdon said...

I live in Australia (and yes, I smoke) and I have to say plain packaging is the greatest furphy ever cooked up by so-called public health advocates.

Bolstered by invented figures from former Prime Minister Kevin Rudd (who claimed the public health cost of smokers to the federal budget was $31 billion per annum when in fact it's $310 million, a 100-fold exaggeration), plain packaging was also accompanied by a 50% increase in tobacco excise staggered over five years (the second instalment took effect earlier this year).

I have spent 20 years in media sales and marketing, dealing with small retailers (including shopkeepers), hospitality venues and supermarket chains, and all have indicated their cigarette sales have barely changed as a result of these measures.

In fact, "declines" in the rate of smoking in Australia are predicated entirely on official Census data, which is compiled by one household member based either on their personal beliefs and/or answers supplied by other householders in relation to consumption items such as tobacco.

I know a lot of regular smokers whose spouses (and children) honestly believe they do not smoke; I also know people who claim not to be smokers at all (such as an old friend who declared -- cigarette and glass of wine in hand -- that he was "glad this (tobacco) is not part of his life."

The problem here is that self-reporting of behaviour that has been made to feel socially odious is often not forthcoming. No smoker I know "gets the message they are trying to send" or whatever formulation the anti-smoking lot put on it: it might be easier to avoid the confrontation or hassle in admitting tobacco consumption, but it doesn't mean those who smoke necessarily feel guilty, or inferior, or compromised.

It's against the law to discriminate against fat people, for example, on the basis of their size, despite the fact illnesses associated with these people (diabetes, stroke, vascular and circulatory disease, blindness, coronary issues etc) are set to explode into public health budgets across the world as these folk "mature" into the full consequences of their lack or restraint. These diseases will cost far more than the treatment provided to smokers. But smokers can be crucified - just because they can be. Others can't.

Where this comes back to plain packaging is that it intersects neatly with the worst of both worlds. On the one hand, governments don't want smokers to quit, representing as they do a sure source of revenue ($8 billion in Australia this year: less the cost of healthcare, that's a tidy profit).

On the other, powerful lobbies who have turned smokers into such a kicking cart need endless new reasons to justify marketing and research budgets, communications and "education" programs, and the like.

Hence plain packaging: it was meant to scare the hell out of us and take any pretence of glamour out of smoking.

I'm addicted to smoking, but I enjoy it, although I certainly don't find it glamorous. The one inconvenience plain packaging has inflicted is the need to check the cigarettes before I pay for them to ensure I'm getting what I want to buy -- the brand names are printed in smallface type in a uniform font -- but that's the least of any smoker's concerns.

In the meantime, the nanny state rolls ever onwards, with the finger-shakers, agenda pedlars and vested interests all finding new ways to substantiate their existence.

The kind of idiocy you allude to, Christopher, is emblematic of it. Is it any wonder governments across the Western world are struggling to balance budgets when this is the kind of pap they pour billions into.

Christopher Snowdon said...

It is rumoured (and of course I wouldn't know) that a lot of independent tobacco retailers will sell you illegal product if they know you well enough as a customer and provided you ask. There have been wildly divergent estimates of the size of the black market, but nobody really knows. Aside from saying it's large, growing, and costing the government billions in lost revenue dollars.

I actually think its part of a bigger, more insidious trend: the illiberal nanny state that knows what's better for its citizens than they do themselves. This (global) movement starts off with "worthy" causes that end up being instruments of crucifixion. You can't wish smokers out of existence, and a large percentage of them are addicted to nicotine to the point it's virtually impossible to quit: so you make it harder, more expensive, and get the revenue whilst sanctioning their demonisation. It's reprehensible.

The same thing is happening with road use, as streets and main roads are narrowed, have lanes carved off for bicycles, speed limits dropped, all tolerances removed from enforcement of minor offences, and a blind eye turned to disruptive things like drivers going too slow and double parking.

Rocketing energy prices through the mandated use of commercially unviable "renewables" and augmented by so-called climate control measures, are another example of the same thing.

I don't think black market sales of tobacco are accounted for at all, nisakiman; I'm certain of it. If they were, it would ruin the story of a drop in consumption according to "official" figures, i.e. those based on excise collected from legitimate retail sale. How embarrassing would it be -- to say nothing of deleterious to the advance of the nanny state -- for public health officials to suffer the ignominy of reporting a rise in tobacco consumption? Of course the illicit sales aren't counted. :)