The tobacco industry relies heavily on its claim that plain packaging will increase the illicit trade in tobacco. The argument is one of the main issues raised in its media campaigns, in its submissions to government, and in its legal arguments before the courts. However, this claim lacks both logic and evidence. It is made in three ways:
- Plain packs will be easier and cheaper to counterfeit than the existing complex branded packs;
- Smokers prefer branded packs and are more like to purchase illicit tobacco that has branded packaging if legal tobacco is in plain packs; and
- Illicit trade in tobacco has increased in Australia after the implementation of plain packaging.
The tobacco industry commissions statistical data on the illicit trade in tobacco for many countries, often using the flawed “empty pack” survey method. In each country that has considered plain packaging, the tobacco companies promote media articles raising fears about illicit tobacco. Leaked internal documents from Philip Morris show this was a central pillar of their strategy to oppose the policy1 Research shows that the tobacco industry uses inflated estimates of illicit trade.2
For example, in the UK, research has shown that in the two years before plain packaging proposals were announced, there were no media articles about the illicit trade in tobacco. In the two years after plain packaging was first proposed, 52 stories appeared in the media about rising rates of illicit tobacco, all of which cited tobacco industry data rather than the official government statistics, which showed the rates were declining. 3
A similar situation occurred in Slovenia with many news articles raising concerns about smuggled cigarettes appearing during the period when the government was considering plain packaging. 4
The industry then links these concerns about the illicit trade to argue against plain packaging laws. In some countries, tobacco companies have even produced short promotional films 5 that raise fears about crime and terrorism, which they say will result from plain packaging.6
These two very similar news articles are from Canada in 2016 and the UK in 2014. The myth that plain packaging of tobacco will increase illicit trade is promoted strongly by the tobacco industry, with no evidence to support the argument.
JTI’s response to the most recent consultation on plain packaging in Canada 7 provides a typical example of the industry arguments. It stated:
“In a plain pack environment, illegal producers will benefit at the expense of legitimate industry. They would be able to replicate easily plain packs and continue to supply the Canadian market with illegal branded packs and clear plastic baggies of cigarettes without health warnings. “ [p. 3]
JTI’s submission relied only on industry funded, discredited data about the extent of contraband tobacco in Canada. It ignored the independent research and official data that shows the illicit market has decreased in recent years. 8
JTI also asserted that plain packs will be easier to counterfeit [paragraph 148]. The only research cited is a report from 2012, commissioned by JTI, by Zimmerman and Chaudhary,9 which has been the subject of academic criticism 10. There is no independent peer-reviewed research to back up JTI’s argument.
JTI also claims that:
“The level of illegal tobacco consumption in Australia has grown more than 20% since plain packaging was introduced.” [paragraph 149]
To support this assertion JTI relied solely on data from a report by KPMG. That study uses an “empty pack” survey, which has been shown to have significant flaws in its methodology . 12 Even that KPMG survey has found no counterfeit plain packs over four years. KPMG has written to the UK Public Health Minister to state that the report has been “misrepresented by others, without our consent, to suggest it supports the contention that plain paper packaging could lead of itself to an increase in tobacco smuggling and duty avoidance.” 13 JTI ignored the official statistics and research that demonstrates the levels of illicit trade has remained constant (see below).
These two very similar news articles are from Canada in 2016 and the UK in 2014. The myth that plain packaging of tobacco will increase illicit trade is promoted strongly by the tobacco industry, with no evidence to support the argument.
The Counter Arguments
- Packaging features used to combat the illicit trade do not change under plain or generic packaging legislation. Enforcement procedures rely on covert (invisible) codes and tax stamps on genuine packs; neither of these is changed by plain packaging. In addition, the legislation requires colorful picture health warnings so plain packs are not literally “plain” and are no easier to counterfeit.
- The demand for illicit tobacco is related to price and availability but not to packaging. 14
- Keeping promotional branding and trademarks on packs does not make counterfeiting more difficult. Counterfeiters are able to copy the existing branded packaging easily. Even Philip Morris has stated that, “[Cigarette packs] are easily counterfeited, despite the inclusion of innovative holograms, special inks and elaborate design details. Evidence shows that counterfeiters can make copies of even the most sophisticated paper stamps in three weeks.” 15 Because plain packs retain the picture health warning, tax stamps, and covert markings, there is little difference in how difficult they are to counterfeit.
- The tobacco industry has for years been complicit in the illicit market by oversupplying low tax regimes. 16 The four major international tobacco companies have paid billions of dollars to settle cigarette smuggling litigation in Europe and Canada. Evidence of the direct and indirect involvement of the tobacco industry in this large-scale fraud is well documented, through the industry’s internal documents, their own admissions, and court judgments. 17 The industry cannot be trusted to provide reliable data or solutions.
- Illicit trade has not increased in Australia since implementation of plain packaging in 2012. Extensive national surveys have shown the illicit trade rate remains at around 3%. 18 The tobacco industry has tried to rely on a report by KPMG that the companies say indicates illicit trade has increased. However, KPMG has written to governments to say that the report has been “misrepresented by others, without our consent, to suggest it supports the contention that plain paper packaging could lead of itself to an increase in tobacco smuggling and duty avoidance.” 19
- No counterfeit “plain packs” have yet been identified in Australia. Counterfeiters have not sought to copy the new unbranded packs — so far, no counterfeit plain packs have been found in Australia. Even the industry-funded KPMG empty-pack survey found no counterfeit plain packs.
- Plain packaging of legitimate products can make illicit tobacco easier to identify. If illicit products all have branding but legal duty-paid tobacco is in plain packaging, identifying illicit tobacco becomes easier because virtually all illicit tobacco has attractive branding and logos.
- In the UK High Court Case, the tobacco companies submitted no expert evidence, data, or analysis. Despite trying to argue that plain packaging would increase illicit trade in the UK the tobacco companies merely asserted this claim but provided no evidence at all tosupport their arguments. 20
- A study by the UK Customs and Revenue stated there was “no evidence to suggest the introduction of standardised packaging will have a significant impact on the overall size of the illicit market.” 21
- The tobacco industry has exaggerated the data and manipulated the press in relation to illicit trade as demonstrated by independent research. 22
- Highlighting the dangers of counterfeit cigarettes communicates a message that genuine cigarettes are normal and safe. Both genuine and counterfeit cigarettes are extremely toxic products. There are no safe cigarettes, and there is no safe level of smoking.
Cancer Council Victoria has produced a detailed fact sheet on what has happened to the use of illicit tobacco since the introduction of plain packaging in Australia. Available here.23
1 Available from the tobaccotactics website here: http://www.tobaccotactics.org/index.php?title=PMI%E2%80%99s_%E2%80%9CIllicit_Trade%E2%80%9D_Anti-Plain_Packaging_Campaign.
2 M. Stoklosa. “Is the Illicit Cigarette Market Really Growing? The Tobacco Industry's Misleading Math Trick.” Tobacco Control 2016;25:360–361. Available from: http://tobaccocontrol.bmj.com/content/25/3/360.
3 A. Rowell, K. Evans-Reeves, A. B. Gilmore.“Tobacco Industry Manipulation of Data on and Press Coverage of the Illicit Tobacco Trade in the UK.” Tobacco Control 2014;23:e35–e43; Also see: https://www.theguardian.com/politics/2014/mar/30/tobacco-cigarette-smuggling-scare-plain-packs.
4 Examples of online media articles in Slovenian that raise concerns about smuggled tobacco and then link it to plain packaging include: http://moski.hudo.com/aktualno/zakaj-je-tihotapljenje-v-sloveniji-resen-problem/ ; and https://www.sta.si/2250877/iz-tobacne-industrije-opozorila-pred-porastom-crnega-trga-ob-uvedbi-nekaterih-protitobacnih-ukrepov.
5 One such video is available from: https://www.youtube.com/watch?v=1NSgPzYJzcs&t=12s.
6 These media articles were accessed on March 2, 2017 at: https://www.thesun.co.uk/archives/politics/863091/plain-packaging-will-lead-to-explosion-in-tobacco-smuggling/ and http://www.torontosun.com/2016/05/11/plain-tobacco-packing-a-boon-to-criminals.
7 Available from: http://www.jti.com/files/2014/7281/6956/JTI_response_to_Health_Canada_Consultation_on_Plain_and_Standardized_Packaging_for_Tobacco_Products._31_August_2016.pdf.
8 G. E. Guindon, R. BurkhalterK. S. Brown.“Levels and Trends in Cigarette Contraband in Canada.” Tobacco Control Published Online First: September 6, 2016. doi: 10.1136/tobaccocontrol-2016-052962
9 P. Chaudhry ,A. Zimmerman. The Impact of Plain Packaging on the Illicit Trade in Tobacco Products. 2012. Available from: http://www.jti.com/files/5113/4150/5828/Impact_on_illicit_trade.pdf (accessed February 22, 2017).
10 K. A. Evans-Reeves, J. L. Hatchard ,A. B. Gilmore.“It Will Harm Business and Increase Illicit Trade”: an evaluation of the relevance, quality and transparency of evidence submitted by transnational tobacco companies to the UK consultation on standardised packaging 2012 Tobacco Control Published Online First: December 3, 2014. doi: 10.1136/tobaccocontrol-2014-051930.
11 KPMG Illicit Trade in Tobacco 2015 Full Year Report.Available from: https://home.kpmg.com/content/dam/kpmg/pdf/2016/04/australia-illict-tobacco-2015.pdf.
12 “Quit Victoria.” Analysis of KPMG LLP report on use of illicit tobacco in Australia 2013 Full year report. 2014. Available from:https://www.cancervic.org.au/downloads/plainfacts/AnalyKPMGFull_year_2013.pdf (accessed February 22, 2017).
13 See https://www.theguardian.com/society/2016/may/22/big-tobacco-final-fight-cigarette-branding-uk.
14 C. Moodie ,G. Hastings, L. Joossens. “Young Adult Smokers’ Perceptions of Illicit Tobacco and the Possible Impact of Plain Packaging on Illicit Tobacco Purchasing Behaviour,”European Journal of Public Health, Advance Access, March26, 2011.
15 Philip Morris International, Codentify, Brochure, 2012. Available from: http://www.pmi.com/eng/documents/Codentify_E_Brochure_English.pdf.
17 See report by L.Joosens.“Smugglingthe Tobacco Industryand Plain Packs.” Available from:: http://www.cancerresearchuk.org/prod_consump/groups/cr_common/@nre/@pol/documents/generalcontent/smuggling_fullreport.pdf.
18 M. Scollo, M. Zacher, K. Coomber, et al. “Use of Illicit Tobacco Following Introduction of Standardised Packaging of Tobacco Products in Australia: Results from a National Cross-Sectional Survey.” Tobacco Control 2015;24:ii76–ii81. Available from:http://tobaccocontrol.bmj.com/content/24/Suppl_2/ii76.full.
19 See https://www.theguardian.com/society/2016/may/22/big-tobacco-final-fight-cigarette-branding-uk.
20 R (British American Tobacco &Ors) v. Secretary of State for Health [2016] EWHC 1169 (Admin). Paragraphs 609, 669 and 996.
21 Available from: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/403495/HMRC_impact_report.pdf. A. Rowell, K. Evans-Reeves, A. B. Gilmore.“Tobacco Industry Manipulation of Data on and Press Coverage of the Illicit Tobacco Trade in the UK.” Tobacco Control 2014;23:e35–e43.Available from: http://tobaccocontrol.bmj.com/content/23/e1/e35.full?sid=2fc80260-7458-44b1-89c2-af867a6caa8a.
22Available from: https://www.cancervic.org.au/downloads/plainfacts/Facts_sheets/Facts_Sheet_no_3_Illicit_tobacco31May2016.pdf