Plain Packaging to proceed

May 31st, 2016 at 2:00 pm by David Farrar

Stuff reports:

Cigarettes will be stripped of their marketing and the Government says it will remove any illusion smokers have about their habit.

The Government has used World No Tobacco Day, to unveils its plans to remove all marketing material from a pack of cigarettes. 

Instead, they will be emblazoned with graphic health warnings depicting the consequences of smoking on human organs. 

“The Government is proposing to use the standard brown-green packaging which is similar to what is used in Australia,” Mr Lotu-Iiga said.

“We’re proposing that mandatory health warnings will cover at least 75 per cent of the front of the packs and all tobacco imagery will be removed. Brand names will be allowed but regulations will standardise how and where the printing is.

“These draft regulations and consultation are another important step in the process towards Smokefree 2025.”

I’m highly sceptical this will reduce smoking rates or smoking intake. If there was evidence it was, then I think you can argue such a move is justified. But there is simply no evidence it is effective. Countries that have introduced plain packaging such as Australia, have also done other measures such as increased taxes, so there is no way to measure the impact of plain packaging alone.

My position has been that NZ should be world leading and trial it in a geographic area, such as the South Island. Then you could compare the change in smoking rates in the South Island to the North Island and see if there is any statistical difference. If there is, it would lead to a huge uptake of plain packaging around the globe. If not, then one can focus on measures we know actually work.

The other reservation I have against plain packaging is the precedent it sets. Once you accept it for one commodity, then the pressure will grow over time for it to be extended to others. Beer, wine, soft drinks, fast food etc. It is a bad precedent to sit.

Key on plain packaging

February 17th, 2016 at 12:00 pm by David Farrar

Stuff reports:

A law that would force tobacco companies to wrap their cigarettes in plain packaging could be in action by the end of the year. 

Prime Minister John Key has confirmed a bill, on pause partway through the parliamentary process, would be resumed and he expected it to become law “sooner as opposed to later”. 

His comments come off the back of a recent success had by the Australian Government, who have been locked in legal action over its attempts to introduce a plain packaging law. 

Late last year, US tobacco company Philip Morris failed in a legal challenge against the law – brought about under a bilateral free trade agreement Australia has with Hong Kong. 

The New Zealand Government was watching the action, and held up its own bill – currently at the select committee stage – while it awaited the outcome of Australia’s court case. 

“It was waiting, and I think the view I initially took was given Australia was in the middle of this court case it probably didn’t make sense for us to embark on that, and then potentially face exactly the same costs for the taxpayer in defending another legal action.”

Australia has been facing two legal challenges – one under the Hong Kong free trade agreement (which was dismissed) and one under WTO rules which is with a WTO disputes panel. I would have thought you’d wait for both cases to be concluded.

As I have said many times, I would like to see plain packing trialed in a scientifically controlled experiment, so we can actually measure whether or not it is effective in reducing smoking rates. Only with a regional trial could we see if any change is due to plain packaging as opposed to other initiatives such as tax changes.

Plain packaging supporters should be fans of this. It would be absolutely solid proof of the effectiveness of plain packaging, which would probably lead to global take up of it. The fact they are all hostile to a regional trial makes me suspicious that they are unsure whether it will have any impact – but as it harms tobacco companies they support it.

I’d actually like to see regional trials for most public health initiatives. The regional use of fluoride, for example, has allowed us to see the difference in tooth decay cases in regions with and without fluoride added to the water supply.

The ability for different areas to have different local alcohol policies should allow us in a few years to measure if stopping supermarkets selling wine after 9 pm has any impact on alcohol consumption and alcohol abuse.

No jurisdiction for plain packaging case

December 18th, 2015 at 2:54 pm by David Farrar

The SMH reports:

The federal government has won its case against tobacco giant Philip Morris Asia challenging Australia’s tobacco plain-packaging laws.

It means the former Gillard government’s plain-packaging laws, introduced in 2011, will remain in place.

Actually it doesn’t. The more significant case is the WTO case brought by a number of countries against Australia. That is yet to be heard and decided. This case is the one under the FTA with Hong Kong.

And incidentally the tribunal could never have ruled that the laws can’t remain in place. At best it would have decided they were a breach and there would have to be compensation or damages.

The tribunal in the arbitration, based in Singapore, has issued a unanimous decision agreeing with Australia’s position that it has no jurisdiction to hear Philip Morris’s claim.   

So this is nothing to do with the merits. It is a jurisdictional issue.

What it does show is that the fear being whipped up against Investor State Dispute clauses was vastly over-stated. The fact this case has failed to gain jurisdiction shows there is a difference between making a claim, and having it upheld.

The WTO case should be heard some stage in 2016. That is the one with the most interest for us in NZ, because we are also a member of the WTO. We were not a party to the Australia – Hong Kong FTA, so that case was always of lesser relevance.

Has plain packaging worked in Australia?

September 7th, 2015 at 10:00 am by David Farrar

Christopher Snowdon blogs:

As reported last week by Guido and Catallaxy Files (but no mainstream media outlets that I know of), tobacco sales increased by 0.5 per cent in the first year of plain packaging in Australia. I didn’t want to comment until I’d had a change to look at the newly published stats in depth, but I have now done so and the figures in Guido’s report are spot on.

21,901,393,720 cigarettes were sold in the twelve months before plain packaging was introduced. In the next twelve months, 22,016,130,420 cigarettes were sold. This is a rise – a small rise but a remarkable one considering that sales had been consistently falling for many years before the policy was introduced.

And this is on sales, not just manufacture.

As Sinclair Davidson has explained, advocates of plain packaging have done two things wrong in order to claim that there was a 3.4 per cent decline in tobacco sales in the first year of plain packaging. Firstly, they compared the calendar years 2012 and 2013 despite plain packaging starting at the beginning of December 2012. Obviously, they should be comparing December 2011-November 2012 to December 2012-2013. If they did that they would see that the difference is just 0.8 per cent.

So on the raw figures, the decrease was 0.8% – less than most previous years.

The second thing the campaigners willfully ignored was the tax refunded on tobacco products which were never sold to the public. This is a significant number of cigarettes when you consider that lots of branded tobacco products had to be taken off the market when plain packaging was introduced and were later destroyed. According to newly released data from the Australian government, it amounted to 284 million sticks. When these cigarettes are subtracted from the pre-plain packaging period, it becomes apparent that sales-to-consumers rose by 0.5 per cent in the first twelve months of plain packaging.

Here’s the calculation:

In the twelve months before plain packaging was introduced (Dec 2011-Nov 2012), the figures were as follows:

Manufactured cigarettes: 19,738,170,960

Cigarettes from rolling tobacco: 2,447,248,750

Never sold to the public: -284,025,990

Total: 21,901,393,720 

In the twelve months after plain packaging was introduced (Dec 2012-Nov 2013), the figures were as follows:

Manufactured cigarettes: 19,433,987,920

Cigarettes from rolling tobacco: 2,582,142,500

Total: 22,016,130,420  

Sales increase in the first year of plain packaging = 0.524%

I’d be interested in the data for the following 12 months also. The challenge is how to work out the impact of one policy (plain packaging) when other policies (excise tax increases) are also occurring.

This is why I think New Zealand should do a regionally based trial. Then after three years one could compare the change in smoking rates in the region/ with plain packaging with the regions without.

The importance of brands

May 18th, 2015 at 4:00 pm by David Farrar

Oliver Hartwich from the NZ Initiative writes:

One of the greatest advances of civilisation is also one of the least obvious: branded products.

We take brands for granted because they are everywhere. People do not just drive any car but a Holden, a Ford or a Ferrari. For fast food lovers, there is a world of difference between McDonald’s, KFC and Burger King. Fashion aficionados care about labels as much as techies do about smartphone brands.

The reason we care about brands is because they provide orientation in markets. People trading with each other have spontaneously found out how useful brands are in this process.

Part of the usefulness of brands is that they signal a certain quality. They become worthless if their products do not deliver. As they say in marketing, “nothing kills a bad product faster than good advertising”.

For companies, a brand is not just nice to have, but one of their biggest assets. Brands take a long time to build because they contain everything that consumers associate with a product. This is why Apple’s brand, for example, is now estimated to be worth $US118.9bn.

In a world of complex markets with millions of buyers, sellers and products, brands provide orientation. This is what brands contribute to civilisation. Imagine a world without them and how much more difficult it would be to navigate.

Unfortunately, this dystopian vision is where we are heading. When plain-packaging rules for tobacco products were introduced, the justification was to promote health goals. Fair enough, but these could have been achieved in different ways as well. The negative side effect of plain-packaging, however, was the precedent it set for other product classes.

In Australia, packaging and labelling limitations on pharmaceuticals are being discussed. If implemented, logos for pharmaceuticals would disappear, making it harder for consumers to pick their preferred painkillers. Meanwhile, confectionary producer Mars has voiced its fear that soon Mars, Snickers and Twix could meet the same fate. Who knows what will be next?

The International Trademark Association has expressed its concerns over the increasing reach of plain packaging rules for different classes of products. They rightly see them as an interference with property rights and warn of the detrimental effects on competition.

I would go beyond that. By limiting companies’ ability to brand their products, we are taking a backwards step on civilisation.

This is one of the best summaries I’ve seen of the dangers of having plain packaging as a precedent. You can be in favour of increased tobacco control measures, but against plain packaging due to the very bad precedent it sets.

I would support plain packaging for tobacco if it could be proven to work and guaranteed it would not create a precedent for other industries. But we know it will. Almost every tobacco control measure has now been endorsed or promoted for other industries such as alcohol, food, soft drinks, pharmaceuticals etc etc.

The push starts for plain packaging of fast food

March 31st, 2015 at 11:00 am by David Farrar

AOL reports:

Aaron Shultz, an Australian health campaigner, is calling for plain packaging featuring health warnings for junk food. He has posted a picture on Facebook of what he believes the packaging could look like – dropping the branding in favour of a picture reminding people of the price they could pay for a junk food habit.

Shultz is a health campaigner, who runs an organisation called Game Changer. It has a broader aim: to halt the promotion of alcohol, junk food and gambling through sport. He argues that by associating sport with these unhealthy brands, it normalises junk food, and contributes to the growing obesity problem in Australia.

Why not just have the Government decide what food is acceptable to buy?

The expansion of plain packaging beyond tobacco products has been something that analysts have talked about since plain packets were first proposed. An Adam Smith Institute report by Christopher Snowdon recently claimed: “The extension of plain packaging to other products is not just possible, it is highly likely.” He added: “What happens to tobacco today tends to happen to other ‘unhealthy’ products tomorrow.” He cited sin taxes, advertising bans and health warnings as proof that “we can be confident that the temperance lobby and the diet police will fight for it to happen with plain packaging.” Snowdon is a pro-smoking author and journalist, so the idea of extending plain packaging brings him concern, but it will cheer health campaigners.

This is indeed the problem. One can have a view that due to its nature, tobacco should have all these additional regulations. But the problem is these campaigners then try to expand these regulations to everything else they disagree with. It never just stops at tobacco.

Why would you not wait to find out it is legal?

March 2nd, 2015 at 1:00 pm by David Farrar

The Herald reports:

The Government is being lobbied to bring the tobacco plain-packaging bill back to Parliament for a final vote, now the policy has been found to work “almost like a vaccine against tobacco” in Australia.

The health select committee last year supported the bill but the Government has delayed bringing it back to the House pending the outcome of the challenges against the Australian law by the tobacco industry.

But National support partner the Maori Party and lobby group Action on Smoking on Health (Ash) now say the decline in smoking seen in Australia since its “standardised” packaging law came into force in 2013 means New Zealand can dally no longer.

And public health expert Robert Beaglehole, a University of Auckland emeritus professor, says plain packaging in New Zealand “must be passed with urgency”.

“The Australian evidence shows standardised packaging of cigarettes has had an immense impact on smoking and has worked almost like a vaccine against tobacco use in children and young people.”

Umm, the evidence is far from conclusive. Some data has said a decrease, other data an increase.

Worse of all, the plain packaging came in at the same time as tax increases, so one can’t know what the impact of the measure is.

As I have said many times, the best way to resolve the debate would be to have a geographical trial, where you could compare the change in regions with plain packaging against the change in regions without.

Canberra is defending its law in two cases: before World Trade Organisation adjudicators in a case brought by tobacco-producing countries including the Dominican Republic, and at a United Nations commission’s Permanent Court of Arbitration in a case linked to Hong Kong and tobacco firm Philip Morris Asia.

Maori Party co-leader Te Ururoa Flavell rejected the Government’s waiting on the legal challenges. “Waiting for the World Trade Organisation decision means more people die or are sick from smoking-related illnesses.

Smoking rates are, thankfully, already declining in NZ. Waiting to find out if plain packaging is illegal under WTO agreements we have signed up to, is very sensible. Why would we implement a law which a few months later may be ruled illegal?

The firm claimed plain packs had “seen a 32 per cent jump” in Australian teen smoking, from 3.8 per cent in 2010 to 5 in 2013, but the Age reported a Government statistician saying it was not possible to say there had been an increase as the sample size was too small and the change was not statistically significant.

As I said the evidence is contradictory at this stage. It would be good to have robust data that measures solely the impact of plain packaging.

Two years of plain packaging in Australia

December 1st, 2014 at 1:39 pm by David Farrar

Plain packaging for tobacca products was introduced in Australia two years ago.

An analysis of Australia’s plain packaging was conducted by Professor Sinclair Davidson and Dr Ashton De Silva from the School of Economics, Finance and Marketing at RMIT.  They conclude:

“Despite our econometric efforts, the data refused to yield any indication this policy has been successful; there is no empirical evidence to support the notion that the plain packaging policy has resulted in lower household expenditure on tobacco than there otherwise would have been. There is some faint evidence to suggest, ceteris paribus, household expenditure on tobacco increased.”

They also note:

Further clouding some commentators’ appreciation of the situation, the 2013 National Drug Strategy Household Survey results (Australian Institute of Health and Welfare 2014) indicated that overall tobacco consumption was down on 2010 data – but that cannot establish any efficacy of the plain packaging policy per se in addition to the long-term downward trend in tobacco consumption.

This is why I support a regional trial of plain packaging in NZ (if it is found to be legal by the WTO). That way we could get hard data on whether plain packaging has a significant impact on smoking rates, beyond the already existing downwards trend.

The researchers note:

At best, we can determine the plain packaging policy introduced in December 2012 has not reduced household expenditure of tobacco once we control for price effects, or the long-term decline of tobacco expenditure, or even the latent attributes of the data.

To the contrary, we are able to find a suggestion that household expenditure of tobacco has, ceteris paribus, increased. In our forecasting exercise the actual data come close to breaking through the 80 per cent confidence interval. While we do not want to over-emphasise these results, we do conclude that any evidence to suggest that the plain packaging policy has reduced household expenditure on tobacco is simply lacking.

Also even Otago University seems very doubtful on whether plain packaging will reduce smoking rates. In a blog post here, four researchers put plain packaging in a category of “Uncertain but possible” impact for achieving the NZ smokefree goal.

I’m not against plain packaging if there is proof it will have a significant impact on smoking rates. But as it is basically a quite draconian precedent in terms of state confiscation of intellectual property, the evidence needs to be very strong that it will be effective. So far there is no such evidence.

Smoking rises after plain packaging in Australia

June 9th, 2014 at 12:00 pm by David Farrar

My position on plain packaging has it that it might be justified, if there is evidence it actually reduces smoking rates. If NZ is to proceed with it, I have advocated for a regional trial of it so smoking rates in that region can be compared to the rest of the country after a few years.

So far only one country has implemented plain packaging.  The Australian reports (paywall) on what has happened:

Labor’s nanny state push to kill off the country’s addiction to cigarettes with plain packaging has backfired, with new sales figures showing tobacco consumption growing during the first full year of the new laws.

Policies should be based on evidence, and the evidence is that sales have increased. But maybe they were on an increasing trend anyway, and the law meant they did not increase so much?

The 0.3 per cent increase, though modest, goes against a 15.6 per slide in tobacco sales over the previous four years — and undermines claims by then health minister Nicola Roxon that Australia would introduce the “world’s toughest anti-smoking laws”.

Well that’s a huge reversal.

Plain packaging laws, which came into force in December 2012, have instead boosted demand for cheaper cigarettes, with reports of a more than 50 per cent rise in the market for lower cost cigarettes.

Makes sense. You destroy brand differentiation, and people then just choose on price – and the cheaper prices lead to greater sales. A huge own goal.

Australasian Association of Convenience Stores chief executive Jeff Rogut said sales by his members grew by $120 million or 5.4 per cent last year. “Talking to members, one of the most common refrains they get from people coming into stores is, ‘What are your cheapest smokes?’,” he said.

The law of unintended consequences.

In the wake of the introduction of plain packaging, and the hike in the tobacco excise, 21-year-old Brisbane finance worker Dunja Zivkovic said she has switched to a cheaper brand and smokes more. She said none of her friends had quit in the wake of the policy change.

Both Ms Zivkovic and her friend and fellow smoker, 32-year-old Gertrude Sios, insist plain packaging does not work as a ­deterrent.

“If someone is addicted to smoking, they’ll spend their last $12 on smokes, not food,” Ms Zivkovic said. Geoffrey Smith, the general manager of consumer products at Roy Morgan Research, said plain packaging was “not having much impact”. “It’s causing a shift towards lower priced product rather than ‘I’m stopping smoking’,” he said.

I’ve always been sceptical that brands cause people to smoke, as opposed to cause people to pick a particular brand.

“Smoking kills 15,000 people annually with social and economic costs estimated (at) $31.5 billion each year,” she said. “The latest ABS data shows smoking rates have been continuing to decline.” But data released in recent weeks by the NSW and South Australian governments show smoking on the rise.

Last year’s NSW population health survey, released last month, showed 16.4 per cent of all adults in the state smoke, up from 14.7 per cent in 2011, while in South Australia rates were up from 16.7 per cent to 19.4 per cent over the past year.

Which backs up the sales data.

The signs of increased smoking echo another Labor intervention into health policy — the 70 per cent tax hike on ready-mixed spirits or alcopops announced in 2008.

Nielsen research found that while alcopop consumption dropped by 30 per cent, there was an overall net decline in alcohol consumption of just 0.2 per cent.

People substituted to other alcoholic drinks such as hard spirits.

Some may argue that one year’s data is not enough to judge the policy on. If so, then how long a period would they agree is long enough to then decide if the policy has succeeded or failed?

If three years, then fine. No one else should implement plain packaging until the three years are up, and we can see if smoking rates declined or not due to plain packaging in Australia. So far, after one year, the answer seems to be no.

Now they want plain packaging for fizzy drinks

May 31st, 2014 at 11:00 am by David Farrar

TVNZ reports:

The statistics have sparked debate on whether plain packaging for sugary food products should be introduced, like that being argued for tobacco products.

Speaking to TVNZ’s Breakfast, Auckland University marketing expert Dr Mike Lee says plain packaging for sugary drinks could come into play over the next ten years.

The proposal for plain packaging for tobacco products has caused an uproar with concerns it could spill over into fast food and alcohol products, says Mr Lee.

“There is the worry from companies that we are going to become more and more of a nanny state,” he told the programme.

That is the game plan. Anything they disapprove of will be banned, or plain packaged.

Does plain packaging work?

April 1st, 2014 at 4:00 pm by David Farrar

The Herald reports:

The tobacco industry has ramped up efforts to persuade New Zealand against plain packaging, by circulating research claiming to show the policy has not worked in Australia.

However, tobacco control experts have dismissed the findings and say it will take years to see the effects of the policy.

Philip Morris, the manufacturer of Marlboro cigarettes, has drawn attention to “three separate data sets that demonstrate plain packaging has not reduced smoking rates in Australia”. Two are company-funded surveys of smoking prevalence, by Zurich University and by policy consultancy London Economics. The third is industry sales data, released by the company, showing a 0.3 per cent rise in the volume of tobacco delivered to retailers last year. …

Philip Morris Australia and New Zealand corporate affairs director Chris Argent said that since plain packaging took effect in Australia, “hard data shows that the measure has not reduced smoking rates and has had no impact on youth smoking prevalence”.

“The plain packaging ‘experiment’ in Australia has simply not worked.”

The two surveys tracked prevalence – one of them looking specifically at youth – before and after the introduction of plain packaging.

My view on plain packaging is that *if* plain packaging does reduce smoking rates, then I think it can be justified. However it should only be introduced if the evidence is that it does reduce smoking rates.

The Cancer Council Victoria said the Zurich authors of the youth study had committed a “breathtaking error of logic” in looking for an immediate drop in prevalence. Adolescents’ uptake of smoking was gradual, starting with the first puff, passing through experimentation to an increasing number of cigarettes smoked each day. Plain packaging would take years to affect youth prevalence “because the change needs to occur early in the period of uptake to divert adolescents from becoming regular smokers as they age into adulthood”.

Professor Janet Hoek, of Otago University, echoed these views.

She said it would have been remarkable if the interviewees, after just one year of plain packaging, had “completely forgotten associations the tobacco industry has carefully cultivated over the last decade”. Researchers had always expected plain packaging’s effects on prevalence to occur over the “medium term”, as branding links were replaced in people’s minds by adverse responses to tobacco and smoking.

The logical response to this is to not introduce plain packaging in any further jurisdictions until you do have the evidence that it reduces smoking rates.

In my experience many public health advocates are motivated more by hatred of the companies that sell the products they see as harmful (and tobacco is), rather than actually reducing the harm of the products.

In terms of waiting to see if they work in Australia, one challenge is other measures like changes in excise tax may impact smoking rates also, and we may never know what is the cause of any change.

That is why my preferred way forward is to introduce plain packaging in one region of New Zealand (a large one, maybe even the entire South Island) and then over time measure the change in smoking rates in that region to the rest of NZ. If the change is a greater decline then you have the evidence to introduce it to all of NZ. If there is no measureable impact, then it should be scrapped as ineffective.

Some will say why not do plain packaging, even if it doesn’t work, because anything that hurts tobacco companies is worth doing. Well I can sympathise with that, but I think the precedent it sets is a serious one. Inevitably you will then have certain groups then advocate plain packaging for other products they disapprove of – spirits, beer, wine, soft drinks, fast food etc.

The plain packaging law

February 11th, 2014 at 12:00 pm by David Farrar

The NZ Herald reports:

A hard-hitting law change to stamp out the tobacco industry’s last avenue of marketing is likely to get wide support when it comes to Parliament.

The Smokefree Environments (Tobacco Plain Packaging) Amendment Bill could get its first reading today and is expected to be backed by all parties except New Zealand First and the Act Party.

On the eve of the debate, United States business groups fired a warning shot at the New Zealand Government, urging it to halt the “unwise” legislation because it trampled on company’s trademarks.

The Government expected to have to defend its plain packaging regime in court, and Prime Minister John Key said yesterday it would wait until Australia resolved its legal challenges before passing the legislation.

As I’ve said before, my preference is to trial plain packaging, and for it to be implemented only if it is effective in reducing smoking rates. Introduce it in say the South Island and over three years see how the smoking rates differ in the South Island compared to the North Island. If the South Island’s smoking rate reduces significantly faster than the North Island then implement it nationally. If it does not show a significant difference, then scarap it. Have the decision based on science and facts, not emotion.

The other issue is that we now know that whatever is pushed in the present as an anti-tobacco policy, will in a few years be also promoted for other industries such as alcohol, food, soft drinks, sugar etc.

Act leader John Banks, on the other hand, said he would oppose the bill. He told the Herald: “No one dislikes smoking more than me”. But he was against the state seizing property rights without compensation.

Will ACT be the only vote against? Maybe at select committee they could propose an amendment so the law is trialled before being implemented.

Another push for plain packaging – for food

October 9th, 2013 at 12:00 pm by David Farrar

Stuff reports:

If the Government is serious about reversing the obesity epidemic, it must introduce tough new rules on the packaging of children’s treats, Consumer NZ says.

The consumer advocacy group is calling for the control of marketing gimmicks on food packaging – particularly cartoon characters, free toys and on-packet puzzles targeting children.

Consumer chief executive Sue Chetwin said under-13s were particularly susceptible to tricks of the advertising trade. With a person’s lifelong food preferences formed at an early age, if companies rope them in young, they’ll likely be hooked for life, the watchdog’s report says.

American researchers have found children preferred the taste of McDonald’s-branded food over that in plain packaging, even though both were identical – and the same effect was seen with cartoon characters like Dora the Explorer.

Chetwin said licensing kids’ characters from companies like Disney was costly, and companies would not invest the cash unless they knew it would pay off.

Of course, but do you ban marketing just because it is effective?

New World currently has a evil genius promotion where you can buy a toy cupboard store for your kids if you shop there, and then every time you shop there so much spending gets you a toy item for the toy store.

I’ve had reports from mums that their kids are now demanding they only shop at New World, so they can get extra products for their toy stores. They love being able to play shop. They face full scale tantrums should they now shop anywhere but New World. Some marketing executive has earned a very large bonus.

But who is losing out here? It’s Countdown. Families are not generally doing extra grocery shopping to get the toys. They are choosing New World over their competitors.

Do we want a country where the Government approves marketing schemes. I don’t. You can push for measures like plain packaging, and then instead they’ll do promotions like toy stories. So what next? Require a Government agency to approve all promotions for all businesses? It’s a nasty slippery slope.

Consumer was asking the Government to set out a framework specifying what marketing techniques could and could not be used on children’s food packaging.

Health Minister Tony Ryall said the Government had no plans to introduce such regulation.


Food and Grocery Council head Katherine Rich said many food and beverage companies already regulated themselves, including Mars and Coca-Cola.

But she doubted government regulation would earn public support.

“Do they really want plain-packaged chocolate: no Cookie Bear, Milky Bar Kid or Freddo Frog? Obesity is clearly an issue but banning all childhood fun is not the answer.”

The fun police!

Plain packaging for fast food?

September 10th, 2013 at 12:00 pm by David Farrar

Daniel Fisher at Forbes writes:

Anti-smoking activists call it “plain packaging,” but it’s anything but: The black boxes with strident warnings and gruesome pictures of dying smokers that Australia requires on tobacco products are eye-catching by design.

They’re also drawing the attention of legal scholars who wonder if Australia’s law stripping cigarette companies of the right to use their trademarks could open the door to similar measures against other products activists consider unhealthy.

A pending challenge before the World Trade Organization could determine whether Bloombergian anti-obesity crusaders, say, could require pictures of diabetes-ravaged feet on cans of soda or morbidly obese patients on bags of potato chips.

I have no doubt that the zealots want to extend plain packaging to everything they disapprove of – alcohol, soft drinks, McDonalds, chippies, chocolate etc.

Gervais says he’s no fan of the tobacco companies. But he is concerned that the WTO could diminish trademark rights if it rules in favor of Australia on tobacco packaging. This is the “first TRIPS debate on the intersection between trademarks and health,” he told me. “It’s a huge precedent to set no matter how you cut it.”

Only countries can challenge a national law under the WTO’s dispute-resolution process. So far Cuba, Honduras, the Dominican Republic and the Ukraine have filed complaints against Australia to protect their cigar and cigarette businesses. The U.S. has been conspicuously silent, although it joined some 30 countries and the EU in seeking observer status.(Note: the White House recently revised its position on the Trans Pacific Partnership treaty to allow slightly tighter regulation of  tobacco than other products.)

Interesting observation on the TPP.

Youth wings are meant to disagree with their parties sometimes

February 22nd, 2013 at 4:00 pm by David Farrar

I’m a big believer that youth wings of political parties should from time to time disagree with their parties. They are not doing their job if they do not. Their role isn’t just to sell their party to young people, but to represent the views of young people to their party. Sycophancy does neither side a favour.

So I was pleased to see the Young Nationals come out this week with this release:

The Young Nats oppose the Government’s assault on freedom and responsibility as it moves to introduce plain packaging.

“This is just plain populism and nanny state interference all over again. We can’t see how this will actually reduce the harm of smoking” says Young Nats Policy Officer, Megan Hands.

The Young Nats champion individual freedom and personal responsibility.

“All companies should have the right to package their goods as they choose. Buyers should also have the right to exercise their power of consumer choice and absorb the responsibilities that come with such choices” says Hands.

Plain packaging sends a message that it’s acceptable for the Government to interfere wherever and whenever they like.

The Young Nats urge the Government in the strongest terms to consider the values of our party before blindly supporting nanny state antics.

Again, this is a good thing – not a bad thing. Of course, you don’t want your youth wing disagreeing with the parliamentary party constantly – that then becomes destabilising and marginalises you. But sycophancy is just as unhelpful.

So well done Young Nats on speaking up. I don’t agree with everything that have said, but it is good to see them prepared to criticise the Government when they think it has made a wrong decision.

The plain packaging decision

February 19th, 2013 at 2:13 pm by David Farrar

For some reason the Government has been unable to e-mail out the official statements, so this is based on listening to the press conference. But the decision appears to be:

  1. New Zealand will follow Australia and legislate to allow for mandatory plain packaging of tobacco products
  2. The regulations to implement the law will not be activated until the conclusion of the WTO cases a number of countries have filed against Australia for its decision

 The second part of the decision is sensible. Implementing it prior to the WTO cases being concluded would just open New Zealand up to possible trade sanctions. As a country that has benefited from WTO decisions in our favour (such as apple exports to Australia), it is important we obey the rules we agree to.

In terms of the main decision to implement plain packaging, if legal, my views are:

  1. It is desirable and appropriate for the Government to take measures to reduce smoking rates, considering the cost to the health system of smoking, and the devastation to families by early premature deaths. Various policies have lowered the smoking rate massively over recent times.
  2. Tobacco is a dangerous addictive product that kills even if taken as intended. It is fundamentally different to say alcohol which is fine in moderation. Also in my experience the vast majority of tobacco users are addicted and desperately want to give up and regret they started. By contrast the vast majority of drinkers have no desire to give up alcohol, rightfully so.
  3. I do not like the precedent of the Government confiscating intellectual property such as brands from private businesses. Tobacco companies may not be popular, but they sell a legal regulated product. My concern is that various groups will use this decision to advocate plain packaging and confiscation of brands and intellectual property for other companies such as alcohol and “fast” foods and “fizzy” drinks. Make no mistake that this is on their agenda.
  4. Taking the competing beliefs of (1), (2) and (3), I would support plain packaging if it stops young people taking up smoking. Tobacco is different to other products and I believe the gains from fewer young people smoking outweighs the damage caused by the precedent of intellectual property confiscation.
  5. However there is no evidence that plain packaging will reduce the uptake rates of smoking, or the overall smoking rates. The so called evidence is laughable – basically a few surveys of teenagers asking them if they find plain packs less attractive than branded packs. Of course they say yes. That is very different from whether the pack design would affect their decision to take up smoking or keep smoking.
  6. My preference, as previously stated, was to trial plain packaging in one area of New Zealand, and compare to change in smoking rates to the control group in the other area. This would allow its effectiveness to be measured without being contaminated by other policies or initiatives such as increases in tobacco taxes. If it was shown to be effective, then  it would be rolled out to all of NZ and made permanent.

A science-based approach is far preferable to making a decision based on hope.

However the decision has been made, and will be implemented so long as legal under WTO rules we have agreed to. What my hope is that the Government will still at least try and monitor its effectiveness and see if it impacts smoking rates by trying to isolate the impact of plain packaging from other changes such as excise tax increases, or advertising campaigns.

Dom Post on plain packaging

January 21st, 2013 at 10:00 am by David Farrar

The Dominion Post editorial:

As Action on Smoking and Health spokesman Michael Colhoun noted, the ”scream test” is a good indication of how effective any initiative to reduce smoking rates might be. This holds that the louder the tobacco companies squeal, the greater chance of the measure having the desired result.

Actually that’s a stupid statement and a stupid test.

Let’s say the Govt passed a law saying that there will be a special company tax rate in NZ for tobacco companies – 95%. They would scream loudly about that, yet it would not reduce smoking by one person.

Why don’t we focus on effectiveness, not hatred.

New Zealand’s three main tobacco companies have also hinted at legal action to halt the move.

The Government should not be deterred by that threat.

Australia’s High Court last year rejected industry claims that the introduction of plain packets across the Tasman amounted to theft of intellectual property, the main argument used by tobacco companies.

There is still a WTO case on this issue, but I agree that legal issues should not be a major consideration (unless there is advise such a law would clearly breach treaties we have signed).

A report on plain packaging from Germany’s Berenberg Bank last year described it as ”the most material outstanding threat” to the tobacco industry and said that it was expected to have a big impact on preventing young people from taking up smoking.

A report from a bank?

I am skeptical that plain packaging will reduce smoking rates. If there is evidence that it would make a significant difference, then I think there is a case for it.

As I have said many times before, the Government should trial plain packaging. So there is a control to trial against, the best way to do this is a geographic trial where the same policies, laws and taxes apply in both areas – with the sole exception of plain packaging only applying in the trial region. The trial region could be as large as say the South Island.  Over say three years you’d compare the change in smoking rates in both areas.

If plain packaging was shown to be effective, then NZ would be lauded around the world for doing a proper trial, which produced conclusive proof that plain packaging was effective. It would be implemented in dozen of countries within years.

If the trial showed plain packaging did not affect the smoking rate, then NZ could focus on policies that are effective such as the excise tax.

Trying to suppress free speech

October 26th, 2012 at 10:00 am by David Farrar

Bean Heather at Stuff reports:

A tobacco giant is being accused of illegally advertising cigarettes under the guise of a “public awareness campaign”.

The Health Ministry has received 14 complaints against British American Tobacco New Zealand’s “agree/disagree” campaign opposing plain packaging.

The complainants say the company’s campaign – which has included television, radio and print ads – breaches the tobacco advertising ban.

But the ministry has disagreed, with chief legal adviser Phil Knipe claiming that there were “insufficient grounds to support enforcement action at this time”.

Of course the complaints went nowhere. The ban on advertising of tobacco is designed to stop marketing of cigarettes – not designed to stop a company from voicing its opinion on a regulatory issue. I suspect those who complained know that.

As it happens I think the BAT campaign is stupid, and in fact likely to be counter-productive to their cause. So don’t think I am defending the campaign. But BAT have the right to voice their concerns over a proposed law.

The name of the company is very different to the name of a cigarette brand. I doubt 99% of those who smoke a BAT cigarette know whom BAT is.

Advertising Standards Authority chief executive Hilary Souter said she had also received complaints calling the campaign illegal, all of which had been referred to the ministry.

“Whether or not the ad is a tobacco ad is outside our mandate,” she said.

On Friday, the authority also dismissed five complaints against British American Tobacco (BAT) regarding other aspects of its campaign. Most complainants felt the campaign was misleading, confusing facts with opinions.

One complainant called it “an attack on the sovereignty of political discourse in New Zealand”.

Actually those trying to suppress the rights of free speech are the real attack on the sovereignty of political discourse.

More on plain packaging

September 5th, 2012 at 6:37 am by David Farrar

The Herald reports:

A new study has discredited the tobacco industry’s assertion that there is no proof plain packaging on cigarette packs reduces the appeal of smoking.

How can you discredit something, that hasn’t been asserted? This is a classic red herring.

As far as I have observed no one disputes that numerous surveys have shown smokers say they find branded packs more appealing than plain packs. This study has reached the same conclusion as several others. It is nothing new.

Scientists from Canada, the United States and Brazil conducted a study of 640 young Brazilian women to determine if cigarettes had the same appeal when presented in plain packaging.

“The women in this study rated branded packs as more appealing, more stylish and sophisticated than the plain packs,” said study leader David Hammond of the University of Waterloo, Canada.

I am sure they do.

However the key question is not about whether packaging makes a particular brand of cigarettes more appealing, but whether plain packaging will reduce the proportion of people who smoke or the amount people smoke. And as far as I can see this research does not answer that question.

I personally welcome effective anti-smoking measures. I do regard tobacco as different to alcohol. Around 95% of the smokers I know want to give up smoking, and have tried to do so. None of my friends who are drinkers want to give up drinking alcohol (except for that 48 to 72 hour period after a big night out).

With plain packaging I can accept the argument that until you try it, you will never be able to measure its effectiveness. But this is an argument to trial it, not to implement it blindly.  A plain packaging requirement does create a precedent, and already some advocate it should also apply to alcoholic drinks and even to fast food. That slope might get very slippery.  Any decision to introduce it should be based on proven success at reducing smoking – not hope.

There are two ways it can be trialled. One is to let another country do it first, such as Australia, and see what happens. However that will only work if Australia doesn’t implement any other measures at the same time. If they put up the excise tax also, then it will not be possible to know if any reduction in smoking rates is due to the excise tax increase (which has proven success) or plain packaging.

So my preference again is to have a geographic trial in New Zealand, such as have plain packaging in the South Island for a two year trial. Then measure any change in the smoking rates and quantity of tobacco sold in both the North and the South Island, and see if the South Island change is statistically significant.

This would be a win-win. If it shows there is a statistically significant difference, then that trial will be used globally as evidence to introduce plain packaging. If the trial shows no significant difference, then New Zealand avoids implementing a measure that sets a disturbing precedent and doesn’t actually achieve anything.


A reader has sent me this, which is a graphic of the current packs used in Brazil. They are vastly different to those currently allowed in NZ. No rotting eyeballs and the like on the packs. It is a no brainer that people will say those packs are attractive. That is, as stated above, a different question to whether they may more people smoke, or smokers smoke more. And as NZ packs look nothing like the above, using the results to argue for a change in NZ is silly.

Again – I am not against plain packaging if it works in reducing the number of people who smoke, or the amount people smoke. I just want any decision to be based on a proper scientifically conducted trial with a control group.

Dann on plain packaging

August 25th, 2012 at 10:00 am by David Farrar

Liam Dann writes in NZ Herald:

For capitalism to work properly the companies that bring us wonderful shiny things such as smartphones, or services like insurance and banking, need to have security about the rules for doing business. Property rights and the security of intellectual property are crucial to provide a platform for a healthy, thriving economy.


British American’s New Zealand general manager, Steve Rush, says plain packaging proposals create a “disturbing precedent” for other industries.

They don’t.

Here I disagree. Health officials overseas are already advocating plain packaging for other products such as fast food. It is naive to think otherwise.

But nothing, no free trade deal or international treaty will ever trump the right of a society to protect its young from harm.

I agree also.

We should include tobacco with the other legal highs being regulated out of existence by Peter Dunne’s new legislation. That legislation puts the onus on distributors of legal highs to prove their product is safe.

If someone invented tobacco today and applied to sell it, it would be declined. But we live in the real world where people have been smoking for hundreds of years, and no country in the world prohibits the supply of tobacco – mainly because such prohibition would not work.

On the one hand it claims that branding and design are of little significance with regard to making smoking more attractive. On the other hand it lobbies at huge cost to maintain those brands.

There is the old argument that packaging is all just inter-brand warfare – that the Marlboro red appeals to one kind of consumer and the Benson & Hedges gold to another. That sense of self-identification with a brand is important in advertising.

It might convince us to choose one kind of jeans over another. But it is the combined effect of all the stylish advertising from the apparel industry that keeps denim cool and hip for each new generation.

As there is little evidence that denim is more dangerous than, say, corduroy – other than in a fashion sense – it would be wrong for a government to get involved in regulating trouser advertising.

If there was clear evidence that denim was deadly, it would be wrong for it not to.

Here Dann misses the point. Look if there was proof that plain packaging reduces smoking rates, I’d have little issue with it. But there is zero proof.

Rather than make decisions to confiscate property rights on close to blind faith, why not do a trial? Have plain packaging in one area of NZ (maybe the SI) and over three years monitor the change in their smoking rates to the rest of NZ.

Shouldn’t decisions be based on science?

Trial plain packaging

July 24th, 2012 at 1:00 pm by David Farrar

Stuff reports:

Plain packaging for tobacco is no “slam dunk,” Prime Minister John Key says.

The Health Ministry today released an assessment on the impact of a plan to strip all branding off the packaging of tobacco products.

Officials backed the plan, saying it would reduce the likelihood of consumers being misled about the harmfulness of tobacco and increase the effectiveness of existing health warnings. It would also bring New Zealand into line with a plain packaging policy in Australia due to take effect in October.

But the paper warned of a ”reasonably high risk” of legal action that could cost millions of dollars in legal costs alone.

Australia has already been challenged by three countries through the World Trade Organisation (WTO) and by tobacco companies at the High Court for its plain packaging policy. The objections are over the alleged violation of international trade rules and the loss of value in trademarks.

Officials said New Zealand would face legal costs of $3m to $6m for “international investment arbitration” and a further $1.5m to $2m to defend a WTO case.

Key today said the Government felt it was “likely” to be able to legally introduce plain packaging but it was “not absolutely clear cut”.

‘‘There are lots of things we need to consider – I wouldn’t say it’s a slam dunk by any chance that plain packaging will take place but nor would I rule it out. It really is, genuinely, a true consultation period,” Key said.

I think we should take a science based approach to this issue, and do a trial – perhaps in the South Island. The research I have seen to date merely states that some young people say they find the packaging attractive. That is very different to concluding that fewer people would smoke with plain packaging. I’m all for reducing the number of people who start smoking, but that doesn’t mean one should support every measure proposed. The key things to ask are “Will it work?” and “What are the negative consequences of the measure?”.

No country in the world has plain packaging, so we do not know if it will work. Now, I accept the argument that you don’t know if it will work until someone does try it. This means we could wait for the results from Australia. The problem is that with overall smoking rates on the decline anyway, it will still be hard to tell if any decline was due to the plain packaging.

Hence why we should trial it in say the South Island. Have a three year trial, and at the end of each year survey the smoking rates in both North and South Island and see if there has been any significant variation in the rate of change. If the South Island rate has declined significantly more, then you would be on safe grounds to make the trial permanent, and extend it to the North Island. If it has not, then the trial ends.

Also kudos to David Shearer for being sensible on this issue, as also reported by Stuff:

Prime Minister John Key has been labelled a ”wimp” for refusing to commit to plain packaging of tobacco.

But the taunt, from Labour MP Clare Curran, is not backed by her leader David Shearer who said Key’s cautious approach was ”actually a responsible thing to do”.

A decision to implement or not to implement will be based on inadequate information. That’s why a trial is the sensible way forward. It will allow the benefits, if any, to be quantified.

Plain packaging

July 4th, 2012 at 1:00 pm by David Farrar

A J Park write at NZ Lawyer:

As discussed, Article 2.2 of the TBT says that technical regulations should not be more trade restrictive than necessary to “fulfil” a legitimate objective, and that international standards should be adopted except where they would be ineffective or inappropriate for achieving those goals. To minimise trade barriers, only the part of the standard that is necessary should be adopted.

Studies on whether plain packaging of tobacco products is effective in reducing smoking rates have shown mixed results. Evidence does show that plain packs are less attractive to smokers than branded packs, that plain packaging has negative connotations, and that health warnings become more noticeable in the absence of other marks. But does this mean it will result in fewer people smoking? The studies show smokers would be more likely to choose a branded pack than a plain pack, but is there evidence they would choose no pack over a plain pack?

A comprehensive review of 37 leading plain-packaging studies showed plain packaging reduced the appeal and attractiveness of cigarettes, and that consumers viewing plain packages were more likely to think about quitting (Moodie et al, Plain tobacco packaging: A systematic review, Public Health Research Consortium, 2012). However, the evidence as to whether that would lead to smokers actually quitting was not conclusive. As the authors noted, because plain packaging has not yet been introduced in any country, it has not been possible to evaluate the impact of the policy in practice.

Which makes me wonder again why we are proceeding, not on the basis of science but on hope.

The sensible thing to do would be to wait for results of Australia’s plain packaging regime.

An alternative would be to scientifically test the policy in New Zealand. Say introduce plain packaging in the South Island only, and see if South Island smoking rates change over time any differently to North Island ones.

Let’s do a controlled test of plain packaging

May 9th, 2012 at 11:00 am by David Farrar

Eric Crampton blogs:

There isn’t any real-world evidence on the effects of cigarette plain packaging legislation, mostly because nobody’s really done it yet. What we have are a bunch of surveys of smokers and non-smokers on how cigarette packaging makes them feel, whether they think different designs are more or less likely to encourage them to smoke, and the like. In other words, a bunch of hypothetical musings in low consequence environments.

If we’re stuck having Tariana Turia’s proposed legislation, let’s do some good with it. Set it up as an experiment. Implement plain packaging in part of the country, but not elsewhere. Then see what happens. If it seems successful after a few years, implement it everywhere; if it doesn’t, abandon it. Either way, publish all the results so we have a better handle on what works. So plain packaging in Christchurch but not in Dunedin, in Wellington but not in Rotorua. I’m sure there are plenty of folks who specialize in designing randomised control trials of this sort who’d be able to run things.

This is an excellent idea and one that plain packaging advocates should support. If they are sure it will reduce smoking rates, this is their chance to prove it.

If we apply plain packaging to the whole country at once, we have no way of knowing whether the policy does anything. A careful randomised control trial could tell us something useful.

Some measures you can not test geographically, but plain packaging is one you can. The Government should be pro-science and agree to trial it.

Herald on plain packaging

April 28th, 2012 at 11:15 am by David Farrar

The NZ Herald editorial:

The Government has been persuaded to follow Australia’s decision requiring cigarettes to be sold in plain packs.

The theory seems to be that if all brands are forced into the same style of packet – perhaps a dirty light brown, dominated by health alerts and grisly pictures, the manufacturer identified in small type of a standard font – smoking will lose much of its remaining appeal. This must be the insult to trump them all.

Tobacco companies maintain plain packs will do nothing to reduce smoking and it is hard to disagree. Their business is not one of those that has to compete on artificial brand distinctions with a necessarily identical product. Smokers discern different blends and so long as they can find their preferred brand they are unlikely to care about the packet.

Social science claims to have found that cigarette packaging has some effect on younger people.

A recently published paper was based on group discussions and interviews with young smokers and non-smokers when they were shown plain white packs with prominent health warnings. They offered observations such as: “It looks so boring”, “it’s just budget … it’s like, lame”. Research of that sort insults everyone’s intelligence.

I’ve blogged on this myself. The research is far far from convincing.

Plain packs seem unlikely to bring the anti-smoking campaign much closer to its goal of a smokefree New Zealand by 2025. That goal, endorsed by the Government, could require much more drastic steps, especially in taxation.

A working paper produced in the Ministry of Health is said to suggest raising the cost of cigarettes to $100 a pack in order to reach the target.

The Maori Party seems particularly determined on the issue. With 44 per cent of Maori still smoking, more than twice the proportion overall, the party makes no apology for tax increases that hit the poor hardest.

A 12 per cent excise increase in 2010 is reckoned to have lowered tobacco sales by 10 per cent over the following year. Price is clearly the weapon that works, the only feature of a cigarette packet that counts.

If the cost needs to reach $100 a pack, and they are currently around $20, then they need to go up $80 a pack over 13 years, so an increase of around $5/year.

More on plain packaging

April 23rd, 2012 at 1:25 pm by David Farrar

Martin Johnson at NZ Herald reports:

The claim by New Zealand’s main tobacco companies that plain packaging will not reduce the prevalence of smoking has been dismissed by a researcher who tested the concept.

Okay, so what was tested.

One study Professor Hoek cited involved group discussions and in-depth interviews with 86 young adults, both smokers and non-smokers, about tobacco packaging including their views about sample plain white packets with expanded health warnings which they were shown.

“That just doesn’t look trendy at all … it’s just budget … it’s like, lame,” one participant said of the plain packaging, according to a paper published in the journal Qualitative Health Research last December.

Other comments included:

“There’s just nothing attractive with it. There isn’t a cool colour, there isn’t any kind of marking that would grab you.”

“For someone who’s starting smoking … it’d be a lot harder to identify with a brand if it’s just colourless.”

So let us accept that packaging can affect whether a packet looks trendy or cool.

The paper concludes that, given tobacco companies’ huge efforts to develop brands that appealed to young adults, “it is logical to assume that decreasing these appeals would, over time, reduce the behaviours they stimulate and support”.

But this is the leap of faith. It is all based on an assumption that having packets with less appeal, will lead to less people smoking.

The reverse psychology that as tobacco companies spend huge money on developing brands that appeal, then getting rid of the brands will decrease demand is also flawed. Because we do not know whether the brands attract smokers to that particular brand, or attract someone to become and remain a smoker.

That is what I’d like to see research on.

I would note that smoking prevalence has been dropping consistently, despite the more sophisticated branding compared to a generation ago.

If there is actual research showing that plain packaging reduces the smoking rate (as opposed to reduces the attractiveness of a packet), then there would be a stronger case for plain packaging.