Tobacco plain packaging laws have been an expensive, illiberal waste of time. It has restricted the right of companies to market legal products and turned more smokers onto illegal tobacco. This creation by public health zealots must be repealed.
Plain packaging was introduced by the Gillard government in 2012. Since that time it's true to say that smoking rates have fallen. But smoking rates in Australia have been falling for more than five decades. The decrease in consumption following the introduction of plain packaging continues to follow that trend.
And even if there had been a significant departure from that trend the Gillard government significantly increased the tobacco excise just one year after the introduction of plain packaging laws.
These massive tax increases — 12.5 per cent per year for four years — makes it almost impossible to determine whether changes in consumption patterns are due to plain packaging or increased prices due to higher taxes, or something else entirely. That's not to say plain packaging hasn't had any impact on tobacco consumption. It clearly has. One of the most significant changes during the period of plain packaging has been the growth of the illegal tobacco market.
A KPMG report into illicit tobacco released in October last year found that the prevalence of illegal tobacco or "chop chop" is on the rise. Between July 2013 and June 2014 KPMG recorded an increase from 13.5 per cent to 14.3 per cent of total tobacco consumption.
Most tobacco consumption rates don't take illegal tobacco into account. Although rates may be decreasing in line with the long-term trend it appears that some consumers are switching to chop chop, meaning that the actual consumption rate has remained relatively stable.
Further analysis showed that this growth in illegal tobacco consumption was driven by higher volumes of unbranded consumption, from 0.8 million kilos to 1.1 million kilos. Notably, the illegal importation of tobacco has increased substantially over recent years, from 0.5 million kilograms in 2012 to 1.3 million kilograms today.
The legal retail market has felt the pinch. The Australian Retailers Association noticed a significant impact just 12 months after the introduction of plain packaging laws. ARA Executive Director Russell Zimmerman said back in November 2013 "the change to plain packaging has been a waste of retailers' time and resources."
If the Abbott government is serious about its red tape reduction agenda, here's a good place to start.
Plain packaging laws are also an attack on intellectual property rights.
Tobacco companies are selling a legal product to willing consumers. But this market has been singled out for special treatment. Restrictions on marketing and sale are more significant than for the majority of legal products on the market.
This is an ongoing problem. Figures released by the US-based Property Rights Alliance show that protection of property rights in Australia is in steady decline. Tobacco plain packaging laws are perhaps the most obvious recent contributors to the parlous state of property rights protection.
When the laws were challenged in 2012, the High Court ruled that plain packaging amounted to the extinguishment of the intellectual property rights of tobacco companies.
Meddling public health professionals have been spruiking the benefits of plain packaging for years. But it's time they admitted that they got this one wrong. Plain packaging has failed to reduce tobacco consumption rates, while giving a leg up to the tobacco black market and stripping away commercial and intellectual property rights.
A new year, a clean slate. In 2015, let's kick the tobacco plain packaging habit.
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