Tuesday 1 December 2015

Smokers are paying the price for plain packaging's failure

As Sinclair Davidson and Simon Clark have pointed out, plain packaging in Australia is three years old today. It did not lead to even the slightest dip in cigarette sales or smoking prevalence and so must be considered a failure. Not only did it fail, but efforts to pretend it hasn't failed are costing smokers dearly. Here's why.

Before plain packaging came in, the Labor party planned several tax rises of 12.5 per cent (plus GST) to be staggered over a couple of years, starting in December 2013. The Liberals stuck to these plans when they got into office.

These tax rises have helped to spare Labor's blushes. It is glaringly obvious from Australian Bureau of Statistics' data that the long-term decline in tobacco sales came to a grinding halt in the first year of plain packaging (the graph below shows the chain volume of tobacco sold each quarter in $ millions). Sales not only rose quarter-on-quarter throughout 2013 but sales in the first year of plain packaging were higher than in the previous year. The downward trend only resumed once the tax hikes began. 

The result is that smokers in Australia are being clobbered with hefty tax rises just to maintain the same downward trend that was taking place before the policy was introduced. This allows blowhards like Simon Chapman to claim that tobacco sales are at their lowest level for decades as a result of plain packaging when the truth is that nearly every rich country has seen tobacco sales fall to their lowest level for decades without plain packaging.

Britain, for one, has seen a much sharper fall in (legal) tobacco sales since Australia brought in plain packaging and, unlike Australia, it has seen a clear decline in the smoking rate.

Nothing is more important to Australian 'public health' campaigners than plain packaging being perceived as a success. Pride is at stake and there is a World Trade Organisation dispute in motion which requires the Australian government to show that the policy has achieved its public health objectives. Evidence for this is obviously in short supply, which explains why the government's post-implementation review has been repeatedly delayed despite being due for publication months ago.

In the meantime, smokers will continue to be clobbered with large tax hikes to maintain the illusion that plain packaging hasn't been a total waste of time and money (with predictable consequences for the black market). The Labor party has recently announced that it, if elected, it will continue to increase the tax by a further 12.5 per cent every year for four years.

As usual, the public are paying for the 'public health' lobby's folly. Expect to hear ASH shouting for tax rises even more loudly than usual once plain packaging is introduced to the UK.

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