No-brand cigarette packs

[Julia]

Has the government gone too far with this proposed legislation? ie the decision that cigarettes may only be sold in the same olive green plain packs with no branding obvious?
The tobacco companies will fight this hard in court.

Wouldn't such a change remove any capacity on the part of manufacturers for a competitive advantage in any visual sense, and thus leave them with only price on which to compete? And then isn't that going to drive price down and defeat the supposed objective of making it harder for people to smoke?

And if cigarettes are going to be so treated, should we also be seeing cessation of advertising for calorie and fat laden fast foods, ditto confectionery and alcohol?

Seems to be a peculiar disconnect between the penalties on the unfortunate smoking addicts and the assistance provided to heroin addicts with their free syringes, safe injecting rooms etc (and yes, I understand the principle of harm minimisation), bearing in mind that one product is legal and the other illegal.

I'm interested to know what others think? Should fried chips/hamburgers etc only be allowed to be sold in plain packaging? Attractive packaging for alcohol banned?

 

[Tanaka]

I’m quite against ‘nanny states’. There are too many dumb individuals in this world to create a piece of legislation for. There comes a point where if people at too dumb to understand and act on the knowledge that is being passed onto them then they should be responsible for their actions.

I say, do what you like as long as you don’t hurt others. But then lies my dilemma, if people stuff up their bodies they burden the health system which costs me and all tax payers.

There is simple answer but incredibly merciless. Get people to sign a disclaimer every time they buy something that could cause them injury, illness or death. The disclaimer should point out that they will not get any assistance from any tax payer if they were to become injured, ill or die from the product. [insert doctor evil laugh here]

 

[DB008]

Has the government gone too far with this proposed legislation?

My opinion here only.

Answer; Not really.
Considering the health costs associated with smokers, why not do everything to turn people off this disgusting habit?

 

[prawn_86]

Considering the health costs associated with smokers, why not do everything to turn people off this disgusting habit?

A common myth about smoking. Revenue received from taxes on cigarettes actually exceeds the health costs.

Its actually why i am surprised the gov is doing this, as they make money from people smoking.

 

[Calliope]

A common myth about smoking. Revenue received from taxes on cigarettes actually exceeds the health costs.

Its actually why i am surprised the gov is doing this, as they make money from people smoking.

They are the most maligned minority group in the country and unlike many other minority groups they more than pay their way. I stopped smoking 30 years ago but I would never criticise those who continue to smoke.

If it is legal to make a product, then it should be legal to put your brand on it. The government has no right to try to change how we make product selection.

.

 

[pixel]

A common myth about smoking. Revenue received from taxes on cigarettes actually exceeds the health costs.

In last night's TV News, Minister Roxon claimed the health-related cosst far exceeded the the tax revenue - although she refused to mention exact figures.

As an ex-smoker, I 'm in two minds about the benefit or otherwise of plain-paper packaging. A brand's up-market image (Dunhill was my poison) may have had an impact on my selection, but the packaging didn't influence my lighting up. Quite often, I would even transfer a day's ration into a flat silver etui.

It took a serious bout of chest pain that got me off the fags - cold turkey.
And a few weeks later, I found out how food and drinks tasted.

Now there is an idea: Can't someone "invent" a pill or concoction that - for a brief time - enhances a smoker's sense of taste and smell? So they realise what they miss out on?

 

[JTLP]

Has the government gone too far with this proposed legislation? ie the decision that cigarettes may only be sold in the same olive green plain packs with no branding obvious?
The tobacco companies will fight this hard in court.

Wouldn't such a change remove any capacity on the part of manufacturers for a competitive advantage in any visual sense, and thus leave them with only price on which to compete? And then isn't that going to drive price down and defeat the supposed objective of making it harder for people to smoke?

And if cigarettes are going to be so treated, should we also be seeing cessation of advertising for calorie and fat laden fast foods, ditto confectionery and alcohol?

Seems to be a peculiar disconnect between the penalties on the unfortunate smoking addicts and the assistance provided to heroin addicts with their free syringes, safe injecting rooms etc (and yes, I understand the principle of harm minimisation), bearing in mind that one product is legal and the other illegal.

I'm interested to know what others think? Should fried chips/hamburgers etc only be allowed to be sold in plain packaging? Attractive packaging for alcohol banned?

Agree 100% about branding issue.

Such a feel good thing to do - if I worked for BAC or any other of the majors I would fight hard on this.

As somebody mentioned - if it's legal to smoke then branding should be legal.

 

[prawn_86]

Obviously there is various stats on the health vs costs issue but here is something i found:
http://www.tobaccoinaustralia.org.au/chapter-17-economics/17-4-benefits-of-tobacco-to-the-economy-

Its not the original study i saw, but does show that taxes on smokes have a net revenue of about $3.5b

 

[Smurf1976]

Smoking - been there, done that and I can't see myself ever taking it up again. Can't stand the smell of it now - and I can smell a single cigarette easily even outside on a busy city street.

But it's a legal product and as such branding ought to be legal too. Taste, popularity amongst peers, price etc - many influences over brand choice but I don't recall the appearance of the pack ever being one of them. Pack size maybe, but not colour.

 

[Sdajii]

I can't see it affecting sales. I don't think anyone buys cigarettes because the pack is pretty. Heck, you can't even see them on display any more. There really isn't much more that can be done to dissuade people from smoking. If they're still doing it now they're probably going to keep doing it no matter what the pack looks like, how much gore you force them to look at (and non smokers have to put up with these disgusting images on the television too!).

If they want to get rid of the labels, yeah, whatever, I don't think it'll do anything, but on the other hand, I don't think it will do anything, so who cares?

I fully agree that it's stupid to be so hard on smokers when an obese person shovels chocolate and fast food into their face. Countless times I've seen fat people eating garbage or drinking sugary soda (extremely fattening) and commenting on how much damage a smoker is doing to themselves! It's odd that it's socially acceptable to berate a smoker, but if I was to say "Stop eating that, you fat pig!" to a fat person eating chocolate I would be considered a terrible monster. It's bizarre that in this obesity epidemic it is seen as perfectly pleasant and acceptable to give little kids chocolate, lollies and soft drink! I'd love to see ads on the television where fat, disgusting people lament the loss of their limbs, the failing of their heart, etc etc due to their overeating, in the same style as the anti tobacco ads. The voting public wouldn't accept it though.

A lot more good could be done by targeting diet and exercise awareness rather than the tobacco issue. They're just trying to find ways to take something further when it has already gone as far as it can.

 

[DB008]

Smoking - been there, done that and I can't see myself ever taking it up again. Can't stand the smell of it now - and I can smell a single cigarette easily even outside on a busy city street.

But it's a legal product and as such branding ought to be legal too. Taste, popularity amongst peers, price etc - many influences over brand choice but I don't recall the appearance of the pack ever being one of them. Pack size maybe, but not colour.

+1
(been there done that too...)

 

[Mister Mark]

I think leave the smokers alone, does anyone smoke a packet of winfield and bash their wife or smash their car? I think not.
As for medical costs, i read a report from some time ago that the cost of health care for a smoker in older age is less than a non smoker as when smokers get sick they die quick, non smokers can live in health care for 20 years or more.
If it is a legal product and it makes the consumer happy what is the problem.
I do drink and dont smoke but if this is about social issues and health care governments are barking up the wrong tree.
Just my thoughts on our socialist sociaty

 

[289]

I don't use heroin, but I don't imagine it comes in a shiny packet, and that doesn't seem to discourage heroin addicts... smokers are no less drug addicts, so I don't see it changing anything.

And as far a discouraging taking up smoking, if I cast my mind back to when I was a youngan - the more people told me I shouldn't do something the more I wanted to do it. I don't think things have changed that much and fear that making cigarettes appear even more "bad-ass" the more youngsters will want to try them, which is after all how every smoker started - just trying.

 

[Glen48]

From today edition.. better change my Avatar



An Unexpected Way to Profit From the Australian Government’s Anti-Smoking Con
by Aaron Tyrrell, Editor, Money Morning

“Under proposed legislation aimed at reducing smoking rates in Australia, all logos will be removed from cigarette packaging, and tobacco companies will be required to print their brand name in a specific font.”

So, the government thinks olive green packaging will stamp out smoking in Australia...
Yeah, right!

Do the powers that be truly believe smokers will be put off by olive green packets?

Banning smoking in pubs and clubs hasn’t worked. Raising the cost of a packet to 20 bucks or more hasn’t worked.

For the record, I don’t smoke.

But I seriously doubt ‘olive green packaging’ will make die-hard OR casual smokers give the coffin nails the flick. If they can withstand a blanket ban on smoking in public (in enclosed areas) and a price of nearly $1 a death stick, changing the packet won’t make a bit of difference.

Besides, they already fiddled with the packaging. And even pictures like this haven’t put smokers off:



So why bother?

Why would the government force tobacco companies to use uniform packaging?

I’ve got a theory...

And – believe me – it has nothing to do with using colour-preference ‘research’ to stamp out lung cancer one smoker at a time.

It’s a scam.

A scam to help big tobacco and the government make EVEN MORE money from cigarette sales.

The sweet irony is anti-smoking crusaders – the ones who have been breathing down the necks of government and big tobacco since the 1980s – will champion this change. A change that will send the industry big wigs laughing all the way to the bank.

If I’m right, there might be a sneaky way for you to cash in on this government subterfuge...

I’ll show you how in a minute.

First, let’s check a few statistics...

Percentage of Adult Smokers in Victoria

Source: quit.org.au

If you trust the statistics – and I’m not saying I do... (and I won’t until you need a licence to smoke... which might not be too far away)... the number of smokers in Victoria dropped from around 5.5 million in 1983 to 3.9 million in 2009.

I worked this out using the percentages in the table above and Australian population figures from World Bank, World Development Indicators.

Interestingly, the number dropped from 5.5 million smokers in ‘83 to 5.2 million in ‘97.

And – if these numbers are right – the introduction of the government’s graphic anti-smoking packaging in 2006 has done next-to nothing to cut down the percentage of adult smokers in Australia.

Of course, it hasn’t taken anything from the government’s purse.

Look at the graph.

You can see the government made just as much money off 3.9 million smokers in 2008 as it made off 5.2 million in 1997. And that revenue stream has been a steady $5.5 billion or so (a year) for a decade


How?

Simple... the government increased the excise on tobacco. It raised the excise per smoke (weighing less than 0.8 grams) by 77.5% between November 1999 and August 2007.
It’s even higher today.

Now, what possible reason could the government have for changing cigarette packaging now?

I’ll give you a hint.

It has nothing to do with stopping kids smoking.

The numbers don’t lie – cigarette package changes have failed to make smokers quit in the last five years.

So, what’s it all about?

My theory – and it’s just a theory mind you – is there’s a big bonus in it for them… let me lay it out for you…

If every cigarette company uses the same cheap government-approved packaging, their manufacturing and production costs will go down. The companies will also save on advertising … because they’ll never have to fork out for branding/re-branding, design or ‘concept development’ for their packages again.

And that could add a few more zeros to their bottom line.

Costs go down. Profits go up. And so do taxes. That is what is in it for the government.

They’ll keep pocketing their $5.5 billion a year in excise revenue. And they’ll pocket bonus tax gains on the increased profits of the tobacco giants.

Forget what you’ve read in the papers. British American Tobacco Australia (BATA) might be threatening to sue the government for billions.

But it’s a smokescreen. Just like the olive green packaging.

Big tobacco wants this change.

Because without personalised branding, the ‘small fish’ in the tobacco pond will die. The small fry won’t be able to attract attention to or distinguish themselves from the big players, like BATA or Phillip Morris.

The only thing these cigarette companies will have left to trade off is their name. And their image. And their reputation. And the big boys have spent more than 100 years and millions of dollars building their brands… Mr Chesterfield still satisfies… smokers still walk a mile for a Camel… and Marlboro men are still REAL men.

There’s no way a smaller company can compete with that! When it can’t advertise, the only thing left to compete on is price.

And this is where the big brands – names people know, trust and already feel a certain way about, like BATA – have the advantage.

Big brands with big bank rolls can cut costs – just like Coles and Woolworths. And it will force smaller companies out of business. Only big players with real money can survive a price war… and when the dust clears they’ll be the ones that corner the cigarette market.

This is where I see big opportunity for you, if you start doing the research now.

It’s like I mentioned a few weeks ago…

Negative sentiment can often trigger a good value-investment opportunity. I imagine Greg Canavan, over at Sound Money. Sound Investments licking his lips at the thought of the negative sentiment building around the tobacco sector right now.

There are the companies themselves. And then there are suppliers. And tobacco retailers.

Once Mr Market catches a whiff, there’s a good chance the stock price of these companies will fall – even though they’re still sound companies with a huge consumer base… and thanks to this cut in costs, their profits are about to increase.

I’m going to start watching these companies very closely. I’ll check annual reports for profitability. I’ll scour company announcements for acquisition deals. And I’ll research the management to make sure it knows what its doing.

And when a price dips below intrinsic value – BAM! – I’ll snap up a few shares. And then, if I’m right, I’ll cash in when the market realises its mistake and re-rates the cigarette companies accordingly.

By this stage, you might think this sounds a bit far-fetched. So I’d like to leave you with some food for thought.

Because something like this has already happened.

Have you heard of the Popular Penguins?


These books all have the same bland cover.

They use the same ugly font on the jacket.

Inside, they haven’t re-typeset the text to fit the format.

They don’t advertise the stories. The only thing the buyer has to go on is the name of a classic story they might recognise printed in plain font on a uniform cover.

Design costs are slashed.

Production is slashed.

Even royalties are slashed… because most of these classics are out of copyright.

(As you can see, there are a few similarities between these orange-covered books and olive-green cigarette packs!)

The books sell cheap – around $9.95.

And, as Peter Blake, the sales director at Penguin Australia said: ‘We've found that younger readers have been really drawn to them…’

(So much for ‘plain packaging’ scaring the kids off…)

In 2009 over a million Popular Penguins were sold. They’re still churning them out. So I assume they’re still turning a profit.

Now here’s the deal.

In one fell swoop – and with one plain design – Penguin completely cornered the classic book market.

It may not be hard proof that this change in cigarette packaging is going to turn a huge profit for big tobacco. But it’s enough to encourage me to spend some time doing the research. As Warren Buffett says, be greedy when others are fearful. Because value opportunities can pop up in the most unexpected places.

Aaron Tyrrell
Money Morning Australia

 

[sails]

I don't think the packaging will make the slightest bit of difference to sales. It's what's inside that people seem to crave and seasoned smokers would know their preferred brands, so the packaging is likely to make very little difference. I suspect the government know that it will probably look like they are doing something, but in reality, not likely to hurt their revenue.

I reckon they should put on the packet how much smokes are costing the smoker each year. Something like " a packet of these per day will cost you over $9,000 each year". I am amazed at how much some people can smoke and then wonder why they have so little money left.

Most smokers seem to think health problems are not going to happen to them until it does. Perhaps the high annual cost of their habit might be a bigger motivator to quit than health reasons.

But even then, the addiction seems to be a hard one to break. I have never smoked, but know people who do and who have struggled unsuccessfully to quit.

 

[Mister Mark]

I don't think the packaging will make the slightest bit of difference to sales. It's what's inside that people seem to crave and seasoned smokers would know their preferred brands, so the packaging is likely to make very little difference. I suspect the government know that it will probably look like they are doing something, but in reality, not likely to hurt their revenue.

I reckon they should put on the packet how much smokes are costing the smoker each year. Something like " a packet of these per day will cost you over $9,000 each year". I am amazed at how much some people can smoke and then wonder why they have so little money left.

Most smokers seem to think health problems are not going to happen to them until it does. Perhaps the high annual cost of their habit might be a bigger motivator to quit than health reasons.

But even then, the addiction seems to be a hard one to break. I have never smoked, but know people who do and who have struggled unsuccessfully to quit.

$9000 per year is a very high figure 10 packs a week, very unusual in this day and age.

Giving up smoking is not that hard, there is a huge industry out there convincing everyone how hard it is.

And at the end of the day every smoker knows the damage it does to THEM.
Leave them alone

 

[sails]

$9000 per year is a very high figure 10 packs a week, very unusual in this day and age.

Giving up smoking is not that hard, there is a huge industry out there convincing everyone how hard it is.

And at the end of the day every smoker knows the damage it does to THEM.
Leave them alone

Based on around $25 per pack of 40. $25 x 365 = $9,125.

Totally agree - leave them alone...

 

[Julia]

Thanks for your responses, folks. As I imagined, overall there is little support for this.
I'll add my own view that it will make no difference at all to addicted smokers and I doubt it will even prevent some young people from having their first cigarette.
It's way more about whatever the prevalent "in culture" is at the time amongst teenagers than about anything as simplistic as pretty packets.

I’m quite against ‘nanny states’. There are too many dumb individuals in this world to create a piece of legislation for. There comes a point where if people at too dumb to understand and act on the knowledge that is being passed onto them then they should be responsible for their actions.

I say, do what you like as long as you don’t hurt others. But then lies my dilemma, if people stuff up their bodies they burden the health system which costs me and all tax payers.

There is simple answer but incredibly merciless. Get people to sign a disclaimer every time they buy something that could cause them injury, illness or death. The disclaimer should point out that they will not get any assistance from any tax payer if they were to become injured, ill or die from the product. [insert doctor evil laugh here]

Tanaka, in principle I doubt many would disagree with this, but it would put doctors with their vow of saving lives in an impossible position I guess.
If this were ever to happen, we'd have to also legislate similarly for people who eat rubbish, fail to exercise etc etc. In other words, it would be impossible.
To revert to my earlier additional point, heroin is illegal, but our society still goes to extraordinary extents to save people who use this illegal drug.

I'd hoped more people might take up the odd disconnect between this and the social exclusion which is more and more being applied to smokers.

A common myth about smoking. Revenue received from taxes on cigarettes actually exceeds the health costs.

Its actually why i am surprised the gov is doing this, as they make money from people smoking.

Prawn, I imagine the government has no illusions that any plain packaging will have any effect at all on consumption, so they do not feel threatened in terms of their revenue. But - because they think we are all idjits - they think we will be sucked into believing they are doing something really useful by this pointless measure, so are at least seen to be doing something.

I can't see it affecting sales. I don't think anyone buys cigarettes because the pack is pretty. Heck, you can't even see them on display any more. There really isn't much more that can be done to dissuade people from smoking. If they're still doing it now they're probably going to keep doing it no matter what the pack looks like, how much gore you force them to look at (and non smokers have to put up with these disgusting images on the television too!).

If they want to get rid of the labels, yeah, whatever, I don't think it'll do anything, but on the other hand, I don't think it will do anything, so who cares?

I fully agree that it's stupid to be so hard on smokers when an obese person shovels chocolate and fast food into their face. Countless times I've seen fat people eating garbage or drinking sugary soda (extremely fattening) and commenting on how much damage a smoker is doing to themselves! It's odd that it's socially acceptable to berate a smoker, but if I was to say "Stop eating that, you fat pig!" to a fat person eating chocolate I would be considered a terrible monster. It's bizarre that in this obesity epidemic it is seen as perfectly pleasant and acceptable to give little kids chocolate, lollies and soft drink! I'd love to see ads on the television where fat, disgusting people lament the loss of their limbs, the failing of their heart, etc etc due to their overeating, in the same style as the anti tobacco ads. The voting public wouldn't accept it though.

A lot more good could be done by targeting diet and exercise awareness rather than the tobacco issue. They're just trying to find ways to take something further when it has already gone as far as it can.

Totally agree. Great summary of the hypocrisy of governments.

From today edition.. better change my Avatar
An Unexpected Way to Profit From the Australian Government’s Anti-Smoking Con
by Aaron Tyrrell, Editor, Money Morning

Glen, I'm not sure what to think about the article. Not sure that people will spend in other retail areas what they save if they stop smoking. And for sure, whatever else they might buy is not going to be as heavily taxed, so the argument seems less than valid imho.

 

[overhang]

I'm really up in the air on this one. There is so much propaganda about the cost to tax payers by both sides. On one side you have the premature death but cancer treatment is expensive plus and depending on how premature they die we have the loss of productivity. On the other hand the elderly are an expensive bunch, particularly with an aging society however in theory we should slowly see their costs curtailed as more people retire with super not requiring handouts.
This is not designed for smokers as their a lost cause but to prevent the youth from taking it up. I have no idea if it will work as youth can be so superficial but there is no doubt that the most successful form of prevention is tax it to oblivion.
As others have stated where do we draw the line? The yanks are predicting the current generation will be the first to have a shorter life expectancy than their predecessors due to obesity which correlates to junk food. Its all very well for me to say as I'm here enjoying a beer.

 

[drsmith]

A simple solution would be to ban smoking altogether in public places.