By Sarah Cosgrove, Monday 16 May 2016
The European Court of Justice has backed the EU Tobacco Directive and told producers of packaging for tobacco products that they cannot use fancy substrates, designs or techniques to differentiate brands following the plain packaging requirement that comes into force on 20 May.
One such firm is Amcor, whose designs include the ‘scissor’ pack, which opens sideways to reveal hidden branding.
The directive will also ban packs of 10 cigarettes, rolling tobacco in packs under 30g and all menthol cigarettes, from 20 May 2020. Packs across the EU are required to have health warnings across 65% of their surface.
Meanwhile, the sector is on tenterhooks awaiting the decision of the UK High Court in an intellectual property case brought by Philip Morris International, British American Tobacco, Imperial Tobacco and Japan Tobacco International.
Many businesses due to be affected by the legislation are reserving comment until the decision comes through but the mood is not good. In Australia, which introduced plain packaging in December 2012, a similar high-profile and very expensive legal battle between the Australian government and tobacco titans did not go the tobacco lobby’s way.
Mike Ridgway of the Consumer Packaging Manufacturers Alliance says: “A lot of printing will be badly affected by the implementation of plain packaging. Plain packaging means standardised packaging doing away with branding and ID, having health warnings and an olive green background with a small font.
“It’s not just graphics, it’s the construction and the substrates. There’s no hot-foil stamping, no embossing, graining or anything that gives the pack any sort of particular graphical marketing characteristics.”
While the plain packaging law, barring a last-minute reprieve by the court, will be introduced in the UK, Ireland and France, the EU directive affects all EU states. Any converter who has decided to make up for lost printing income through focusing on packaging shape, will find itself at the mercy of a double whammy.
Ridgway, a former Chesapeake Branded Packaging executive, adds: “I’m a non smoker; I just think it’s excessive regulation and there’s no proof it works, from a packaging and printing point of view it’s affecting tins, pouches, the whole packaging industry. They have really got issues.”
The pro-plain packaging lobby, however, claims Australian cigarette packs which feature large, gory photographs, do work.
Research by the Cancer Council, published in the medical journal Tobacco Control last year, found 20% of smokers were trying to quit the month before the ban and 27% the month after.
UK substrate manufacturer API is one company that was actively targeting tobacco packaging and at Packaging Innovations at London’s Olympia in September last year, cigarette packets featuring its signature Fresnel Lens PET laminate took pride of place on its stand. API also produces foils used on the front of cigarette packs and the plain packaging legislation has “badly knocked” its business, according to Ridgway.
Printed tobacco packets will not suddenly disappear from shelves. Retailers have a year for ‘sell-through’ and the introduction of standardised packaging could also produce opportunities for creative businesses.
When the Australian ban was introduced in December 2012, enterprising label printers, including Box Wrap and Stickerette, decided to print sticker covers for cigarette boxes. Stickerette has patented its whole pack wraps and now calls itself a global brand which aims to increase sales in the UK and the US under its ‘Your Pack – You Decide’ slogan.
The standardised plain pack design can be produced litho or even digitally, according to Ridgway.
Parkside, Amcor and Multi Packaging Solutions are among the packaging firms likely to be hit. The latter prints cigarette packets on gravure. Amcor Tobacco Packaging president Jerzy Czubak said the legislation posed “a real risk” to consumers.
“Standardised packaging lowers barriers of entry into the tobacco market, leading to de facto creation of scale benefits for criminal organisations trading in counterfeit tobacco. Consumers are exposed to hazardous contents in illicit tobacco products and there will be a limited capacity to authenticate and differentiate between products.
“Amcor Tobacco Packaging believes that standardised packaging represents an unnecessary intervention into not only tobacco, but also packaging in general – a legitimate and essential industry that employs hundreds of thousands of people worldwide.”
Another gravure printer which is likely to be affected by the rules is Benkert. Its Alva, Clackmannanshire plant prints the paper which goes around cigarettes.
“Our argument has always been that if you take complexity out of the packs you’re opening the market up to illicit trade,” Ridgway says. “Over £2bn is lost through tax revenue losses per year through counterfeiting. That’s £8m a day. This business about increasing price is just not going to help. The projection is that by 2020 a packet of cigarettes will be £20 and 14% of trade will be illicit.”
Countefeiting also concerns the BPIF. General manager at BPIF Cartons Neal Whipp, says: “BPIF Cartons supports any packaging initiative that has been proven to improve public health by reducing smoking. However thus far we have not seen sufficient evidence to this effect and so there is a risk that plain packaging may make matters worse by facilitating more counterfeit products at lower prices.”
Another fear is that the incoming rules will have a knock-on effect, in other countries and in terms of other sectors coming under the plain packaging microscope.
Alcohol is the obvious contender but concerns, espoused by the anti plain-packaging fraternity at least, is that fatty and sugary foods could also be in the firing line, as a way to be seen to be doing something to appease the health lobby.
The government claimed sound reasons for pressing ahead with plain packaging. In 2012-13 it spent £87.7m on services to help people stop smoking. It says the new packs will save lives and, in addition, money. Public Health England estimates a £500m healthcare saving if the fall in smoking seen in Australia is mirrored here.
So why not ban them completely? In 2014-15 the government received £9.5bn in revenue from tobacco tax and that excludes VAT. So we have a compromise which benefits some, but packaging printers and converters least of all.