Cigarettes: Neutral packaging still an option
By Sophie Petitjean | Tuesday 10 April 2012
Cigarette packets that look identical apart from the name of the brand in small characters and in standardised font: such is the measure recently adopted by Australia and which the European Commission is currently considering as part of the revision of Directive 2001/37/EC on tobacco products. Yet many member states, such as the Czech Republic, Denmark, Estonia, Greece, Italy, Lithuania, the Netherlands, Poland, Slovakia and Sweden, are strongly opposed to such a move.
The Commission, which is currently finalising its impact study, should present its legislative proposal in the fourth quarter of 2012 (September-October). According to a source involved in the dossier, the Commission has not dropped its idea of introducing ‘plain’ packaging, and will de facto propose increasing the size of health warnings on packets. Meanwhile, pressure is rising. “It is David against Goliath,” says Florence Berteletti, head of Partenariat sans fumée. “But we trust our commissioner.”
AUSTRALIA HAS DONE IT
Plain packaging for cigarettes – this can hardly be deemed an abstract project: indeed, plain packaging should start being in use on Australian territory on 1 December 2012 – dark olive-green packets covered in health warnings. In spite of the complaint filed by the world leader Philip Morris against the Australian authorities, the Commission has also started looking into this option, under the revision of the directive on tobacco products.In 2010, the Commission opened a public consultation, asking stakeholders what they thought of plain packaging to “increase citizens’ awareness to the dangers of tobacco, to dissuade them from consuming them, or to more effectively encourage them to quit”. Currently, all the packets sold in the EU have health warnings (for instance, ‘Smoking kills’) but only ten member states (Belgium, Romania, the UK, Lithuania, Malta, France, Spain, Hungary, Denmark and Ireland) and have introduced illustrated warnings. The consultation document proposed introducing standardised packets that would contain: the name and brand of the product, the quantity of product sold, health warnings and other mandatory information, such as safety information.
“The packet would be of a single colour (white, grey or cardboard colour), while the size and shape of the packet would also be regulated.” The consultation has had mitigated results: among the 87,000 respondents, 1.76% were in favour of the introduction of plain packaging (85.80% asked for no change) .The responses by the member states, published on the Commission’s website, were also mitigated: Austria, Belgium, Bulgaria, France, Ireland, Spain and the UK support the introduction of generic packaging (the UK has even announced a public consultation on plain packaging at national level). Conversely, the Czech Republic, Denmark, Estonia, Greece, Italy, Lithuania, the Netherlands, Poland, Slovakia and Sweden are strongly opposed to it.
Generally speaking, those against it have three types of arguments: the social and economic consequences of plain packaging in the retail sector; the rise of illicit tobacco trade; and the violation of international trade agreements. The European Confederation of Tobacco Retailers (CEDT) alleges that introducing plain packaging could lead to a loss of €1.5 billion for European tobacco retailers, due to product differentiation and the retail margin.
The European association of tobacco growers (UNITAB) adds that this measure would inevitably affect the 68,000 plantations, which account for over 300,000 jobs (mainly in Italy andBulgaria).
Many of those against the measure also fear an increase in crime and illegal trade, which reached around 64.2 billion counterfeited cigarettes in 2010. According to the International Tax and Investment Center, illegal trade represents a yearly loss of €10 billion in tax revenue for the member states. This point of view is supported by a new report, published on 3 April by the Joint Research Centre on Transnational Crime (Transcrime). Lastly, many stakeholders are using brands’ rights and international trade agreements as arguments. In fact, it is just this argument that global tobacco giant Philip Morris used to file a complaint against the Australian authorities. Indeed, by virtue of a bilateral agreement with China, Philip Morris Asia is asking for the withdrawal of the future Australian legislation, as well as “substantial” compensation for losses caused. According to the Association of European Trademark Owners, “It is evident that plain packaging is inconsistent with several provisions of the TRIPS [Trade-Related Aspects of Intellectual Property Rights] Agreement, thus it would be in clear breach of WTO [World Trade Organisation] members’ international obligation to protect intellectual property rights.”
Indeed, Article 20 of the TRIPS Agreement provides that “the use of a trademark in the course of trade shall not be unjustifiably encumbered by special requirements, such as [...] use in a special form”.
Meanwhile, the Partenariat sans fumée – which consists of the British Association for Cancer Research (BACR), the European Heart Network (EHN) and the European Respiratory Society (ERS) – considers these legal arguments to be worthless. “The fundamental aim of intellectual property right is to prevent the use of a brand by a person that does not own it. Even with plain packaging, the owners of a brand would still have their own brands and would be protected against any unauthorised use,” says Partnenariat sans fumée.The organisation claims that this measure is in line with Article 168 (public health) and Article 114.3 (internal market) of the Treaty on the Functioning of the EU (TFEU).
Generally speaking, those in favour of illustrated warnings and mandatory plain packaging for tobacco products stress that these measures would counter the impact of the advertising and marketing means used by the industry.“Cigarette makers have been using packaging as a sales argument for a long time, as evidenced by their secret internal documents [...]. For instance, today they make narrow and long packets that resemble beauty products or perfume especially for women,” says David Hammond, a specialist in social marketing at Waterloo University in Canada. Hammond is convinced that plain packaging would reduce the attraction factor of cigarettes.
Those in favour of such a measure also add that plain packaging would have a good cost-efficiency ratio. Lastly, plain packaging supporters recall that the measure fits the WHO Framework Convention on Tobacco Control ratified by all the member states except the Czech Republic.This convention aims to guarantee that consumers are appropriately informed of the dangers of tobacco via health warnings and that they not be mislead by the tobacco industry’s advertising and promotional tactics (Article 11). Recently, the managing director of the WHO gave her support to plain packaging. On 22 March, at a world conference on tobacco, she called on the global community to back Australia in “thwarting the tobacco industry’s attempts to revoke the new Australian anti-tobacco law”.
A recent study carried out by the economic consultancy London Economics, for Philip Morris, showed that introducing plain packaging will lead to a change from upmarket products to cheaper products.
“Packaging imagery is one source of information in markets that helps consumers to differentiate between alternative product attributes and qualities. If consumers cannot differentiate the brands on the market, they will chose the cheapest brand, and prices will go down. In simple economic terms, when prices go down, demand increases, and that is what could happen with the introduction of plain packaging,” says Dr Gavan Conlon. He adds that existing research showing that plain packaging would reduce the number of smokers is based on statements of intention rather than on an analysis of the real behaviour of people.
“Plain packaging is not a health policy. It does not inform, nor does it educate. On the contrary, it limits information and restricts choice,” says Christopher Snowdon, the author of a February 2012 study by the Adam Smith Institute.
Conversely, a study published in 2011 by the Université d’Anvers states that plain packaging for all cigarette brands would have a dissuasive effect on young people. The study found that it would weaken the role of packaging as a promotional support, that it would make health messages more effective, and would render the packaging insignificant. Using different methods, five studies carried out in two other EU countries (France and Scotland) came to the same conclusions: plain packaging reduces the attraction factor of cigarettes. A recent qualitative study commissioned by the Commission, on tobacco products health warnings, shows the pertinence of health warnings displayed as images.
Other measures envisaged
As well as plain packaging, the Commission is considering the following measures: 1. establishing a regulatory framework, including provisions on new non-combustive nicotine and tobacco-based products; 2. improving consumer information (for example through larger visual warnings printed on both sides, standardising cigarette packaging, information on harmful substances, etc); 3. regulating ingredients, namely those that render tobacco products more attractive, those that create an addiction and those that are attractive to young people in particular (vanilla or fruit flavours, for instance); and 4. revising rules governing the sale of tobacco products.