Tobacco commoditisation encourages criminality

From the Joint Committee on Law Enforcement Inquiry into Illicit Tobacco Hansard

Mr MacDonald: … We are living in a world where cigarette smokers have moved from being very brand loyal to now very price sensitive. Someone could have smoked Winfield or Benson & Hedges all their life, but they are not smoking them now. That brand’s market share is rapidly dropping down to the lower end of the scale. As a retailer, my concern is that, as prices increase, there is nowhere left for them to drop to other than the car park. They are now my bottom line. Over the last three years, they have worked their way down my shelves, and they are on the bottom shelf now.

Then there is this:

Senator LEYONHJELM: I appreciate it is a bit hard to tell which is which—and you say both—but could any of you speculate? Let us suppose the prices had gone up with the excise increases, but we had not had plain packaging. Do you think the consequences would have been the same or different?

Mr Michael : I will speculate. Price has been a significant factor for some time. The price hikes did not help, but to take away branding at the same time as significant price rises is going to destroy brand loyalty.

Mr Rogut : I have to concur on that. When you talk to a few customers and say, ‘Why are you chopping on price?’ the question is that the cachet or image attached to pulling out a gold, silver or red pack is not there any longer. They all look the same, so unless they were absolutely wedded to a particular brand it really is the economy of 100 for $30 rather than 20 for $27.50.

Mr Michael : I might add that we tried to measure this. It was a little bit difficult, but we were getting a lot of reports in about staff confusion and training issues for service staff—particularly for junior staff who have never seen branded packets of cigarettes. I would identify location issues at point of sale as significant within the store, and it is causing delays. Customers will say, ‘Just give me the cheapest one.’ We did try measuring that; it was quite difficult to do.

Mr MacDonald : In my opinion, plain packaging has had zero effect on the consumer but a massive effect on the retailer, and has opened a door for illegal product, because there is less duplication. Staff-wise, stocking shelves, getting the right packet in the right spot and selling the right packet to the customer is extremely difficult. Initially we had people hand back packets and say, ‘No, I don’t like the one with the baby on it,’ and ask for the next one in the line. There were people taking the middle out and throwing the packet away. For a while we tried to make a bit of money out of it by selling stickers that went over the packet. I still have a great pile of them, because that lasted for about a month. Now it is irrelevant to the consumer; it does not change their habit. It just makes our life extremely difficult. Price is the significant factor from a consumer point of view, and plain packaging has assisted the illegal trade enormously.

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9 Responses to Tobacco commoditisation encourages criminality

  1. stackja

    In my opinion, plain packaging has had zero effect on the consumer but a massive effect on the retailer, and has opened a door for illegal product, because there is less duplication.

    I see this most days at the convenience store I frequent.

  2. .

    I am pretty sure I have been sold counterfeit Havan Jewel cigarillos after the introduction of plain packaging.

    They were okay but just not as good as the real thing.

  3. Mayan

    Alcohol taxes are heading the same way, and there is a determined neoprohibitionist movement in this country, too. At some point, high taxes become de facto prohibition.

    I can think of a few people who have their own stills and/or make their own wine. More will join them as prices increase.

  4. Some History

    Why would opening up a big cabinet looking at columns of packs that all look the same be of any negative consequence, i.e., slowing down of sale, to the sales person trying to locate a customer request? If I may indulge in some Tobacco Control “insight”, this just sounds like a tired [evil] tobacco industry argument. Next they’ll be telling us that if it was required by law that the placement of cigarette packs in the sin cabinet be random, changed every morning…. or multiple times during the day, that this would somehow slow down the sales person in locating customer requests? These tobacco industry shills will say just about anything to avoid the implementation of sound (according to the prophesies of Simon Crapman, Mike Drab, and Melanie Fakefield) Public Health policy.

    Why would Leyonhjelm persist in asking questions when all matters concerning “plain packaging” have long been resolved? Our good friend the petty dictator, Simon Crapman, has already provided the definitive conclusion on PP (and any other tobacco-related matter). From his tosserness back in 2014:

    Plunge in smoking attributed to plain packaging
    A dramatic decline in smoking rates has coincided with the introduction of plain-packaging laws.
    The daily smoking rate plunged from 15.1 per cent to 12.8 per cent between 2010 and 2013, according to the largest and longest-running national survey on drug statistics.
    Most people are now 16 before they smoke their first full cigarette, up from 14 in 2010, and 95 per cent of 12 to 17-year-olds have never smoked.
    Public health experts say the findings of the National Drugs Strategy Household Survey vindicate plain-packaging laws, which tobacco companies recently claimed to have boosted cigarette sales by leading to a price war.
    “It’s almost like finding a vaccine that works very well against lung cancer,” said Simon Chapman, a professor in public health at the University of Sydney.
    “It’s that big. This will give enormous momentum to the international push for plain packaging right around the world
    .”

    http://www.smh.com.au/federal-politics/political-news/plunge-in-smoking-attributed-to-plain-packaging-20140716-ztqht.html

    Need anymore be said?

  5. KaaBee

    I would like to see some data on the growth of the chop-chop and illegal tobacco market since the recent price hikes but then I guess it is nigh impossible to obtain reliable input. I have however been led to believe it is very easy to source these products at retail level. The big question is has plain packaging delivered any NETT reduction in tobacco consumption. My guess is it would be very small.

  6. Some History

    While the antismoking prophet, Crapman, has provided an almost lifelong contribution to the sub-mediocrity of Public Health, only a few are aware that the wizard wanker has also been making a sub-mediocre contribution to rock music, albeit irregularly…… in the case of Crapman, it might actually be mock music.

    The Crapster sees himself as a rock muso giggle, fronting the band, the Bleeding Ears Hearts. Unlike the realm of Public Health where the taxpayer foots the bill regardless of the standard of work, in music, if you don’t make the grade, you don’t get work. And so the prophet “muso”, unable to get a gig for his croaking via the usual employment avenues, has resorted to “charity” gigs. Every few years he manages to convince someone to let his band “play” at their charity gig. Being a charity event, people will say, “my musical sensibilities have been terribly violated, but it’s all for a good cause”. And guess what? This is the year!

    For all you Sydney-siders, are you in for a musical experience. Crapman and the Bleeding Ridiculous Hearts will be “performing” here:
    http://www.ssoe.org.au/the-bleeding-hearts-fund-raising-gig-april-30th/

    Headlining the event is Crapman’s crap band; supporting band is Earth, Wind & Fire…. sorry, just kidding.

    If you just can’t wait, here’s a Crapman “performance” (probably from the last “charity” event) to whet the appetite. Interestingly it’s Crapman, the petty dictator, croaking his way through “It’s my life and I’ll do what I want”….. oh, what irony:

  7. Some History

    And here are the Bleeding… I Can’t Hear Any More “playing” The Easybeats:
    https://www.youtube.com/watch?v=qfuUU0FwTzU

    Note, too, that comments for the Crapman videos are disabled. Quelle Surprise!

    Is there a promoter out there that could set up an evening of Crapman and Kevin Dudd singing the classics…… a mixture of 70s Rock and The Pirates of Penzance….. where the two con artists can showcase their “talent”? Could be hilariously entertaining.

  8. Some History

    I would like to see some data on the growth of the chop-chop and illegal tobacco market since the recent price hikes…

    According to the Crapman Prophesies, ever-increasing taxes on tobacco – even into eye-watering, “twilight zone” levels – have no appreciable effect on a contraband market. Further, the contraband market always remains tiny… of no significance…. regardless of any anti-smoking/tobacco policies.

    The Crapman Prophesies have been appearing over many years on toilet doors in the Department of Public Health, Sydney University.

  9. GregJ

    The idea that there has been a “dramatic plunge” in smoking rates since the introduction of plain packaging and the various vile photographs [of diseased eyes, and diseased limbs, and emphysemiac lungs] is complete and utter bullshit.

    Anyone who lives in any low-income Labor electorate [as I do] knows that there has been a dramatic decrease in the sale of those packets of cigarettes, but a comensurate dramatic rise in the sale of what is known as ‘chop-chop’ – which as most of you will probably know is simply raw cured tobacco leaf chopped up to a form which can be rolled for a cigarette.

    It has got to the stage where every single chinese and vietnamese run convenience store sells this, not quite openly – but if you ask for it they will sell it to you. And good on them for doing so because they are simply supplying a demand which would not have been there in the first place if the government had not gone too far.

    The result of course is that the people in Labor electorates continue to smoke at the same rate as before, but now contribute no tax to the government by doing so.

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