Likewise, the concern that there will be a substantial increase in unbranded or counterfeit cigarette supply is unfounded. What is more likely is that the introduction of plain packaging will make cigarette production far cheaper, therefore making the illegal market less profitable, and less cost effective.
It is surely undeniable that banning all branding will lead to a "substantial increase" in the supply of unbranded cigarettes. That is kind of the point, no?
As for counterfeiting, I'll have a glass of whatever these guys have been drinking. Let me get this straight - plain packaging will make cigarette production "far cheaper", but only for those who produce cigarettes in the legal market? For counterfeiters, however, the efficiency savings of only having to produce one pack design instead of 200 will miraculously not apply. Furthermore, these counter-feiters will be driven out of business because Big Tobacco will be so much more cost effective. I see...
Of course, the only way the legal market could beat the illicit market would be by driving down prices, since low prices are the USP of counterfeit goods, but this apparently will not happen in practice because the government will yet again put up taxes.
'The claim from the tobacco industry that plain packaging will potentially reduce cigarette prices, is likely to be correct,' says Professor Clarke. 'But this price decline can be readily offset by increases in the tobacco excise.'
In summary, then, plain packaging will make it cheaper and easier to manufacture cigarette packs, but not if you're a counterfeiter. The government will then increase cigarette prices which - despite the fact that the illicit trade exists solely because of artifically high prices in the first place - will mysteriously make illicit cigarettes less appealing and less profitable.
Anti-smoking economics - like normal economics but in reverse.
