Monday, 7 September 2015

Plain packaging versus doing nothing

Like a Japanese soldier fighting the Second World War long after the army surrendered, 'The Kouk' is still trying to convince his readers that plain packaging was a success. Every three months, the Australian Bureau of Statistics releases new sales data and every three months The Kouk attributes the record low sale of tobacco products to plain packaging.

The truth is that tobacco sales fall to record lows in most Western countries every three months because smoking has been going out of fashion for decades. What The Kouk doesn't tell his readers is that this downward trend went into reverse in Australia when plain packaging first came in and it only resumed when the government hiked up the price of cigarettes with a tax rise of 12.5% in December 2013 and another tax rise of 12.5% in September 2014.

The latest figures that have got him excited are shown below. The vertical axis shows chain volume sales in millions of Australian dollars.

Tobacco sales, Australia (Australian Bureau of Statistics)

On this occasion, Kouky has at least moderated his position somewhat by attributing the fall to a 'mix of plain packaging laws, tax hikes, advertising bans and health awareness'. But what about plain packaging specifically? It was meant to be a game-changer, after all.

The graph above strongly suggests that it did sweet FA. If anything, it made have led to higher sales. The Kouk's argument is that plain packaging must have worked because tobacco sales fell (eventually). But we would expect nothing less in the long term. The question is whether they would have fallen less if plain packaging had never been introduced.

One way to answer that question is to compare a country that hasn't brought in plain packaging. The obvious candidate is Britain. HMRC data on UK tobacco sales are shown below (in millions of sticks, with loose tobacco converted at the standard ratio of 1,250 sticks per kg).

Tobacco sales, UK (HMRC)
As you can probably guess from this, (legal) tobacco sales are at an all-time low in Britain, as they are in Australia. Sales last year were 14% lower than they were in 2012.*

By contrast, sales in Australia last year were only 7% lower than they were in 2012.

In other words, the fall in tobacco sales in Britain since Australia brought in plain packaging has been twice as steep as the fall seen in Australia.

Tobacco taxes have risen in Britain during that period, but not as much as they have in Australia. Advertising has been banned in both countries for donkey's years and 'health awareness' is surely similar. The only significant difference between the two countries' approach to tobacco control is that Australia has effectively banned e-cigarettes and introduced plain packaging whereas the UK hasn't.

Evidence-based policy, anyone?

* There were 49,245 million sticks sold in the UK in 2012, compared with 42,427 million sold in 2014.

** Chain volume sales fell from $15,352 million in 2012 to $14,215 million in 2014.

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