Tuesday, July 5, 2011

Plain packaging?

One of the big news stories that is in the face of the consumer these days is the debacle regarding plain packaging of cigarettes. I'm not about to pontificate or opine one way or another on the issue, but I think some clarification of the issues is in order.

Let's take a look at the major players here:

1. Tobacco Giants.

They don't call 'em "Big Tobacco" for nothing. They have heaps and heaps of money behind them. And they have heaps of money simply because of the demand for their product...demand that is created through the addictive nature of their product.

It's a case of simple marketing - "hook 'em in and they'll come back for more". And that's one of the problems with their product: it creates a physiological, and subsequently a psychological, dependence on it in those who use it. So the punters come back, time and time again. And it's so hard to quit, so you can either fight it, or continue to submit to your cravings. Thus the cycle continues...

2. The punters.

(and I hesitate to call smokers "users", but that's kind of what I mean). Years ago, it could be argued that people started smoking due to peer pressure and social norms, and that they were unwittingly addicted as a result. But that was before the research and drug education programs, and I guess we could forgive those who, with more knowledge could have made a more informed choice. Generation X and Generation Y smokers have no such excuse - they know the risks, it's their choice to follow that pattern. Due to the nature of the addiction, the coffers of the big tobacco corps are consistently being filled by these people, at between $16-$20 a pack.

3. The government.

The government has been put in charge of regulating the level of corporate domination and influence of big business, as well as looking after the interests of the people who voted them in. They know that smoking-related illness costs the taxpayer billions of dollars every year. They know where the source of the problem is - see point 1. And yet, the government collects billions of dollars every year in alcohol and tobacco excise, and even that has been increased in the last few years. In some cases, major parties, such as the Liberal Party of Australia and the Labor Party have been known in the past to accept funding donations from Big Tobacco.

4. The Retailers.

Due to the nature of the product and it's hold on those who use it, it is a huge seller for retailers. Even after the excise is paid, the major players still get a fair cut of the profits.

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The issues:

1. The government is worried about the draining of the public purse and the stain on the health system due to smoking related illness.

2. Insurance companies don't insure smokers with life insurance policies. It's too much of a risk, as smokers are engaging in life-threatening behaviour. It's almost a forgone conclusion that a large payout would not only be expected, but inevitable...and soon.

3. The government is in a position where it wants to try and appease as many sides of the argument as possible. The anti-smoking lobby are pursuing this issue with an almost militant vigour, and are pressuring the government to make changes. They have to weigh this up with appeasing the big corporates, who are trying to protect their profit margins.

4. Plain packaging is supposed to deter people from smoking, or so we're told. The anti-smoking lobby wants there to be some kind of deterrent to prevent the take-up of smoking in the future.

5. Tobacco companies are just that - companies. They have staff whom they employ, and who need to feed their families and pay the rent. Like any company, they need to watch their bottom lines, to make sure the money keeps rolling in. Given that people are addicted to their product and are compelled to buy it, the money keeps rolling in, right? And it's extremely difficult to quit, so again the money keeps rolling in, right?

They also have another problem - older smokers are dying. How do you get new people in? Due to the dangerous nature of their product, tobacco products haven't been allowed to be advertised in the mass media for over 30 years. How many businesses do you know of that are not allowed to spruik their wares? Not many. How many products are regulated as such that they can only be sold to a select portion of the population?

6. Retailers are worried that they are going to lose sales because of the change of packaging. Retailers are already forced to store their cigarettes behind matt-black doors and drawers, so as not to appear visible. Is plain packaging going to make much difference from this angle?

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There is much hot air on both sides of this debate. The anti-smoking lobby is naive to think that plain packaging is going to deter anybody more than it already does. People are hooked and they have major troubles quitting. It doesn't matter how the product is wrapped or where they source the product from - as long as they get it, then that's all that matters. Plain packaging never stops people buying meat pies in Coles, it won't stop people buying cigarettes.

The Tobacco giants are gong with this whole "Stop the Nanny State" advertising campaign. This is a load of crap. Cigarette regulation and legislation has been enforced for years, surely you're used to it by now? With a product so damaging to one's health and that causes so many other effects to society as a whole, you have to accept that regulation of your product is a given. They do have one good point in all this, however...

...they argue that plain packaging will force them to discontinue the use of their branding and trademarks. There is nothing inherently wrong with branding your product to distinguish it from a product issued by your competitors and to ensure your product is not counterfeit. The government is potentially overstepping their jurisdiction by enforcing this, as this is the entire point of the Trade Practices Act. Intellectual property rights should at least be maintained. All companies and people maintaining a brand name should be granted this right, as a bare minimum. Should this go through, it establishes a dangerous legal precedent.

Retailers who think they'll miss out on sales of cigarettes are also telling lies - people are addicted to this stuff! Are people going to reconsider their purchases due to the nature of the packaging? Of course not. Besides, Woollies and Coles have been selling products in plain packaging for years and it hasn't hurt them in the slightest. So long as people (both customers AND checkout chicks) can still read, they'll still be able to work out what's inside the packages.

I have no answers and no solutions. Packaging won't matter to someone desperate for a nicotine fix. Do big tobacco giants pull out of the Australian market, as some commentators have suggested? No, almost any tobacco market is a lucrative one - there's too much money to lose. The government doesn't want them to leave as they could create a black market and/or counterfeit import trade to occur, and they can't afford to miss out on the excise duty, especially when they can't control the supply of it.

How do you stop the take-up of smoking? Human nature is such that we engage in risk-taking behaviour in order to appear bold, daring, brave, and ultimately for acceptance. People will make stupid decisions. If there was some way to make smoking as appealing as catching a dose of the Clap, we may be onto something. But until then, the battle will rage. But at least we can keep thinking about solutions for this very complex issue.

There has to be an answer somewhere...

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