Print industry takes a stand against tobacco packaging legislation
Wednesday, July 18, 2012
Lobbying has postponed a consultation on proposals to introduce plain tobacco packaging. Printers say it's essential to keep fighting to save jobs
When the Department of Health (DoH) announced a proposal on 16 April to introduce plain packaging across tobacco products, those businesses affected, from retail to production and packaging, were understandably alarmed.
Although originally due to close on 12 July, lobbying from packaging printers and the wider print industry, helped force the DoH to extend the consultation period by one month to 10 August.
Objections across the industry are wide ranging: "This legislation would just open the floodgates for counterfeiting and lobbying for plain packaging across other consumer products," says Parkside Flexibles chief executive Lawrence Dall.
And Weidenhammer Packaging Group chief executive Ralf Weidenhammer asserts: "At a time when Europe is in peril, it is crazy to even consider something that could rip further jobs, contracts and business from the UK supply chain."
Some are even questioning whether, if the proposals were passed, such a legislation could resonate beyond tobacco. Might alcohol, sugary drinks or fatty foods be next?
The proposal has been put forward in an effort to reduce smoking among the UK public, the idea being that standardised packaging would reduce the appeal of tobacco products by enhancing the visibility of health warnings and eliminating design techniques that could glamourise smoking in the eyes of the public.
Yet BPIF corporate affairs director Andrew Brown is concerned that the proposal could have the opposite effect.
"If we start taking the sophisticated elements of tobacco packaging out, then it will become relatively simple for counterfeiters to churn out replicas. The proposal sets out what the packs are to look like, enabling illicit traders to easily copy proposed standardised packaging.
"Tobacco products would become commoditised, so consumers will no longer see the added value in premium products, meaning that they will opt for the cheaper alternatives from the black market. And because cost is a factor that currently keeps tobacco consumption down, these actions could result in an increase in smoking."
And it is not only the threat to health that unregulated counterfeit products pose along with cheaper prices and easier access for younger people. They also have the potential to cause an enormous loss of revenue during these challenging times of austerity.
It is a theory illustrated by the situation in Australia which, in November 2011, became the first country to impose a plain packaging rule for tobacco products: a report released by Deloitte in May 2012 found that illicit trade in the sector had tripled, already costing the government more than A$1bn just eight months since the legislation was passed.
And while tobacco is worth an annual £14bn in taxes to the UK government, the Treasury already loses an estimated £3.1bn per year to counterfeit players in the market.
A boom in illicit trading similar to that experienced in Australia, along with a reduced need for skilled packaging processes would result in loss of work, jobs and income from the industry further damaging the already struggling UK manufacturing sector.
Parkside’s Dall asks: "Where would it end and would the UK’s already diminishing manufacturing industry – its highly skilled creatives, designers and brands – survive?"
The sophisticated techniques involved in creating tobacco packaging, including gravure technology, embossing, varnish, spot colour and hot-foil stamping, require expensive technology, skilled tradesmen and time and resource dedication.
Wipe out the need for these techniques, and along with it goes the investment in the industry.
Chesapeake marketing manager Bob Houghton says the proposed restrictions on finishing and colour variety on tobacco products would render redundant the firm’s Portsmouth and Bradford sites – along with 200 skilled staff.
He adds: "It’s not only the carton manufacturers that would be affected: those companies producing the inner frameboards and film wrapping on cigarette packets would lose work too."
Similarly, Unite’s Steve Sibbald told PrintWeek that discussions with one UK paperboard company revealed that the legislation would inevitably result in a 25% cut across its 400-strong workforce.
"There are potentially hundreds of jobs to be lost, and ones which we would never get back," he said.
Another huge concern amongst lobbyists is the potential for similar proposals to spread across other sectors. This fear is perhaps well-founded considering the government’s recently published Alcohol Strategy, which deliberates plain packaging and marketing bans across the sector.
Amcor Tobacco Packaging chief operating officer Jerzy Czubak, who is based at the firm’s Zurich head office, said the situation was of grave concern: "In the short term, the plain packaging proposal would wreak havoc on our already fragile economy. But in the long term, if plain packaging were to be rolled out into other sectors, it would decimate our industry."
Summing up the argument that is echoing throughout the printing industry, Czubak says: "We have to make a stand now for consumer choice, private property rights, and individual responsibility."
- In April, the Department of Health announced plans to consider the benefits of plain packaging for tobacco products
- A huge number of responses were entered to the consultation, resulting in a one-month deadline extension to 10 August
- Those opposing the proposal have raised concerns that standardised packaging could make it easier for counterfeit traders to enter the UK tobacco market – that jobs, income and trade would be lost, and that prices would be driven down, making it easier for younger people to access tobacco products
- The government receives £14bn tax every year from the tobacco industry, and is currently losing out on an annual £3.1bn to the illicit tobacco market
- Australia is the only country which has introduced plain packaging and since the legislation was introduced in November 2011, counterfeit products have increased three-fold, costing the Australian government A$1bn in tax revenues
How do you respond to the proposed packaging legislation?
Managing director, Filtrona coated and security products
"We believe that introducing plain packaging will not achieve the desired effect of reducing smoking, and will instead encourage illicit trade. Without the need to copy sophisticated packaging, counterfeiting would become much easier and consumers would find it increasingly difficult to distinguish between genuine and illicit goods. Illicit trade is a worldwide problem, feeding the criminal economy and stealing from legitimate businesses and governments. Anything that risks assisting that trade should be avoided."
Chief executive, API Group
"The adoption of plain packaging would send a message to investors, firms and organisations that rely or place value on brands and trademarks: our government cannot be relied upon to protect intellectual property rights and the UK is a relatively hostile environment for business. Branding helps firms set their products apart, attract and inform customers, and promotes loyalty. Remove it and markets become commoditised with price reigning supreme. Companies could migrate to lower cost countries for production."
Director, Chesapeake Branded Packaging
"Even though the government says it will never happen, alcoholic beverages, sugary drinks or fast food will be next. It is even possible that 18-rated computer games, DVDs and music could be targeted, as they have all been spoken of as factors contributing to anti-social behaviour, gangs, knife crime and suchlike.There is no evidence that plain packaging would even discourage smokers. So leave the packs alone and let individuals take responsibility for their actions and decisions."