Plain Packaging in the UK: Opposition Following January 2015 Announcement
On 21 January 2015, the Parliamentary Under-Secretary of State for Health, Jane Ellison announced that the British government would introduce plain packaging regulations before the General Election in May 2015.
Since the announcement, tobacco companies, their associates and supporters have publicly increased their campaign against plain packaging using arguments that there is no evidence it will work, that it will have detrimental impacts on the illicit tobacco trade and business and that Australian evaluations of the legislation confirm this.
Tobacco Companies Respond
In the days following the British Government announcement, three of the four major tobacco companies operating in the UK (Imperial Tobacco, Japan Tobacco International (JTI) and British American Tobacco (BAT)) suggested that they might take legal action if the UK government proceeded with the legislation.
- “After two years of the failed experiment in Australia there remains no credible evidence that plain packaging is having any impact on tobacco consumption rates. Illicit trade, however, has increased significantly...Legal action is always a last resort but when the legislation is published we will be considering our options.” (22nd January 2015)
Head of Communications Jeremy Blackburn said:
- “JTI strongly considers that plain packaging would be unlawful…JTI and others have repeatedly said that plain packaging would infringe EU requirements on the free movement of goods, violate property and other fundamental rights – including trademark rights and go against obligations under EU and WTO rules. We have no doubt the major crime syndicates across the globe are scrutinising these proposed regulations as the UK government prepares to provide counterfeiters with a blueprint of exactly how to copy UK tobacco packs in the future. Brand owners of products in any controversial industries should prepare for similar anti-business measures as the government has now made it clear that regulation will be passed despite the evidence showing that plain packaging doesn’t work.” (22nd January 2015)
- “This is a serious error of judgment given the clear evidence from Australia that plain packaging has not achieved any of its public health objectives and has increased illicit trade to its highest level in seven years. (22nd January 2015)
This was followed in February by Jerome Abelman, Director of Corporate and Legal Affairs who stated:
- “Like any business, if you’re forced into a position where the government takes your property, whether it’s a big company like BAT or a small shop that’s losing its building, either business would be forced into a position of bringing a legal action and seeking compensation,”
- “If the regulation is passed we will have been forced into bringing a legal action.”
Philip Morris International (PMI) did not release a statement following the announcement, but had previously stated in its submission to the 2014 UK consultation on plain packaging that it would “seek fair compensation” should the government proceed with the legislation.
- “'Standardised packaging’ is a euphemism for government-mandated destruction of property. It is unlawful, disproportionate, and at odds with the most basic requirements of the rule of law…PMI is prepared to protect its rights in the courts and to seek fair compensation for the value of its property.”
PMI has brought a law suit against Australia under The Australia – Hong Kong Bilateral Investment Treaty which, at the time of writing in March 2015, is yet to conclude. It also partnered with BAT, Imperial Tobacco, Van Nelle Tabak Nederland and JT International SA to challenge Australia’s legislation in the High Court in 2011, arguing that plain packaging amounted to an “acquisition of property” by the government. The High Court ruled against the tobacco companies.
Legal Opinion Suggests that Plain Packaging is Lawful in UK and EU
Despite the tobacco industry threats, a legal opinion, commissioned by Action for Smoking and Health (ASH) and Cancer Research UK, published in March 2015, concluded that plain packaging of tobacco products is compatible with European law, and therefore tobacco companies would not be entitled to compensation.
- “Our analysis suggests that the UK Department of Health enjoys a broad margin of discretion to introduce a standardisation scheme of tobacco products… The evidence supporting standardised packaging keeps accumulating.”
Tobacco Industry Launches Legal Campaign Against UK Government
On Wednesday 11 March 2015, MP’s in The House of Commons voted in favour of standardised packaging (367 for and 113 against). The measure was broadly supported by Labour and Liberal Democrats with opposition coming from Conservative representatives. The legislation, which was subsequently accepted into the House of Lords on Monday 16th March, ensures that tobacco packets will be of uniform size, shape and design featuring only brand name and graphic health warnings. The measures will come into effect on 20th May 2016 alongside the EU Tobacco Products Directive.
Phillip Morris International (PMI) and British American Tobacco (BAT) filed separate lawsuits challenging plain packaging in the UK on 22nd May 2015. The cases were taken against the British Government for projected losses in income, subsequent to the introduction of plain packaging legislation in March 2015. The tobacco companies argued that the new legislation is in breach of intellectual property and in violation of UK and European Law. Lawyers for the companies have drawn on legal opinion PMI commissioned from Lord Hoffman, the former senior Appeal Court judge, which concluded that banning the use of branding on cigarette packaging altogether could be a breach of trademark law, and that rejecting a company’s right to use an internationally recognised trademark in the UK could be in breach of the principle of free movement of goods within the European Union (EU).
As stated above, a legal opinion commissioned by ASH UK concluded that there were no grounds for a legal case under European Law and that tobacco companies therefore would not be entitled to compensation. Deborah Arnott, Executive of ASH, said in when discussing the tobacco companies’ legal campaign against plain packaging:
- "The tobacco industry knows it has little or no chance of winning but by threatening legal action it is trying to stop the infection spreading to other countries. Standardised plain packaging threatens the profitability of the industry and they are desperate to prevent other countries from following the example set by Australia, the UK and Ireland.”
On 26 May 2015, Japan Tobacco International (JTI), the UK’s second largest cigarette company by market share , joined the legal battle and filed High Court action on the basis that standardised packaging measures infringed the UK’s obligations under World Trade Organisation rules. Daniel Torreas, Managing Director JTI UK, claimed that “plain packaging will infringe [our] fundamental legal rights without reducing smoking. Despite the lack of evidence that plain packaging works, the Government has decided to proceed and JTI must now protect its rights in the courts”
- See Plain Packaging in Australia and Countering Industry Arguments against Plain Packaging for more information.
Retail groups such as the National Federation of Retail Newsagents, which lists tobacco companies among its fee-paying members, and tobacco industry front group the Tobacco Retailers Alliance have been very active opponents of tobacco control regulations such as the Point of Sale Display Ban and Plain Packaging.
In 2011, the NFRN was paid by BAT to campaign against the POS display ban - something that both the NFRN and BAT initially denied. For more information please see National Federation of Retail Newsagents, PMI's Mobilising Support from Retailers and Philip Morris' PR Campaign Against the Display Ban.
This opposition continued after the Government’s announcement. In a piece, published on BetterRetailing.com by the editor of Retail Newsagent Chris Gamm, retailers were encouraged to contact their MPs to tell them that plain packaging for tobacco products will harm their businesses. (Image 1)
- “Pro and anti-tobacco lobbyists will never agree on the true impact of plain packaging on illicit sales in Australia. But for the government to be playing politics with your livelihood with even the slightest doubt about the harmful consequences is wrong.”
- “That is why it is crucial that you use the timing of the announcement to your advantage. Your MP will be working hard to get votes over the coming months. Invite them to your store, tell them about the impact plain packaging would have on your business and show them everything you are already doing to be a responsible retailer.”
Approximately 70 members of the NFRN attended a rally at the House of Commons on Wednesday 11th February 2015. (Image 2) The NFRN met with MPs Nick de Bois and Gerry Sutcliffe to discuss the issue. During the rally, NFRN president Martyn Brown once again urged retailers to lobby their MPs.
- “Make your MP aware that plain packs will not stop young people from smoking,” he told fellow retailers. “Remind them that counterfeit cigarettes are already a huge and growing problem and that putting tobacco products into plain packs will make this even worse.
- “Put pen to paper and write to your MP. Even better, invite your MP to your shop. Talk to your customers and get them to tell your MPs that they don’t want plain packs either.
- “Doing so will mean that together we can send clear messages to the government: that consumers are opposed to plain packs, that plain packs will not prevent people from smoking, that the sale of illicit tobacco will just get easier.
In retail outlets across the country the NFRN placed postcards with misleading images of white plain packs and suggesting that plain packaging legislation will lead to increases in illicit trade, organised crime and terrorism, loss of tax revenue and more children smoking. On the back of the postcards the NFRN encourages people to send them to Chancellor George Osborne (click on thumbnails to enlarge images 3-7). Each postcard back had slightly different text relating to the different images on the front.
The Tobacco Retailers Alliance national spokesman Suleman Khonat also issued a statement following the January announcement:
- “This announcement is a hammer blow to the tens of thousands of small retailers across the country. We are already dealing with the negatives [sic] impact of measures such as the display ban but the evidence from Australia shows that plain packaging has led to an increase in smuggled and illicit tobacco. This will damage the incomes of legitimate businesses and make it easier for children to buy tobacco off street corners. Organised criminals don’t care who they sell to or how old they are. The government needs to rethink this decision if it cares about the future of local retailers and the communities they serve.”
In contrast, a Cancer Research UK report published in March 2015, in which 62 retailers were interviewed, revealed that although 81% of retailers believed that tobacco sales were essential to footfall in their stores, 94% acknowledged that the profit margins on tobacco products were low.
Police Officers respond
O’Reilly is a former Detective Chief Inspector with the Metropolitan Police and a paid consultant for PMI conducting “research” and acting as an industry spokesman on the illicit tobacco trade.
Since 2011, O’Reilly has had stories scaremongering on illicit trade all over the UK, claiming that his research shows that the illicit trade in tobacco products is already on the increase and that plain packaging will make this worse.
He is known to have lobbied against plain packaging on behalf of PMI in England, Scotland, Ireland and New Zealand. In many of the media stories, O’Reilly describes test purchasing of illicit cigarettes in regional locations across the UK and has also been quoted in articles describing Trading Standards seizures.
Since the January 2015 announcement, these such stories continued to appear in the UK regional press. This list of regional media coverage is illustrative of the coverage. Many more articles have been published.
Ex-Police’s Letter to the Telegraph
On 9 February 2015 The Telegraph published a letter co-signed by 16 former police officers. At least one of these officers has been associated with a tobacco company. Roy Ramm was a founding member of The Common Sense Alliance which received financial support from BAT.
For a full list of signatories – please see the full text of the letter.
Tobacco Front Groups, Think-Tanks and Other Third-Parties Respond
The Tobacco Manufacturers' Association (TMA) is the trade association for BAT, Imperial Tobacco and Gallaher (owned by JTI). As the mouthpiece of the industry, the TMA is vehemently opposed to plain packaging.
- “We are very disappointed with the government’s decision. The evidence from Australia clearly shows that plain packaging doesn’t work, so why are they looking to move ahead with it? We hope that when it comes to the vote, MPs will realise that this is simply a flawed policy and vote no to plain packaging. Dogma has got in the way of sensible, evidence-based policy making.”
Most recently the TMA has come under fire for lobbying Local Authorities during the plain packaging debate period in an attempt to engage with them over the illicit tobacco trade.
In the 24 hours following the announcement, tobacco industry front group Forest’s director and non-smoker Simon Clark conducted no fewer than 22 radio, 3 TV interviews, 2 Skype interviews and featured in a number of news bulletins. Forest is funded by BAT, Imperial Tobacco and Gallaher Limited, which is part of JTI.
During these broadcasts Clark restated over and over again that “there is no evidence” that plain packaging will work to reduce smoking and that the policy will play into the hands of counterfeiters. He also argued that the policy patronises the consumer and stressed that consumers’ food and drink products will be next.
Forest’s Industry Links Not Disclosed on BBC Television Broadcasts
Despite facing some tough questioning on his views about plain packaging, it was not disclosed in the BBC television interviews that Forest is funded by tobacco companies. Instead, in each interview Clark is introduced simply as “from pro-smoking campaign group, Forest.” For example:
Forest Claims 99% are Opposed to Plain Packs
In comparison to the 665,989 campaign responses received by the Department of Health in its first consultation on plain packaging in 2012, 136, 404 campaign responses were received in the 2014 consultation.
Simon Clark stated that 99% of these responses were opposed to plain packaging. The summary report of the 2014 consultation reveals that Forest’s own campaign achieved 123,269 responses in the form of petition signatures, standardised emails and letters. During the second consultation no public health campaigns were conducted and therefore the opinion polls are heavily skewed.
- “… was not intended, or designed to elicit representative samples of public opinion. Instead it sought information, comments and views on the consultations questions, draft regulations, impact assessment and equality analysis.”
Furthermore, a January 2015 survey of over 1,800 adults across Great Britain suggested that 72% of the UK public are actually in favour of plain packaging with only 15% against.
“Last Chance Saloon”
Ahead of the Commons vote on plain packaging on 11 March 2015, Forest promoted its “No to Plain Packs” campaign, rebranding it as “the last chance saloon”. (Image 8) As in previous iterations of this campaign, Forest once again encouraged readers to write to their MPs in a last ditch attempt to thwart plain packaging legislation.
Snowdon is a Research Fellow at the right-wing think tank the Institute of Economic Affairs and author of libertarian blog Velvet Glove, Iron Fist who also appeared in the media the day after the Government’s January announcement. He appeared on Five Live Breakfast, the Today programme on Radio 4, published a self-penned an article in The Telegraph and Spiked, and his opinion statement (see image) published on the IEA’s website on the evening of the vote was cited in numerous press articles. In his statement, Snowdon advertised that he was available for media comment (see image 9).
In The Telegraph, Snowdon repeated the industry arguments that plain packaging in Australia has failed to work and that illicit trade has increased dramatically: “there has been a sharp increase in contraband tobacco in Australia since plain packaging was introduced.” Nowhere in the article does is disclose that Christopher Snowdon worked for the IEA or that the IEA accepts tobacco industry funds.
Littlewood is Director General of the IEA. Speaking at an event hosted by Parliament Street, Liberal Vision and Forest on 4 March 2015, Littlewood ridiculed the government’s plans to introduce plain packaging.
Bloomquist is an equity analyst at Berenberg bank. He produced a report called Global tobacco: The plain risk to global tobacco in 2011. The report credited tobacco industry consultant John Luik for his assistance. Plagiarism software revealed that Bloomquist’s report replicated 73% of a report called Erasing Intellectual Property by Luik and Patrick Basham. Bloomquist’s report is therefore regarded as inextricably linked to the tobacco industry.
Following the announcement Bloomquist was quoted in the media promoting the slippery slope argument that other industries will be next.
- “I think it’s highly likely that plain packaging extends into other categories, especially alcohol and junk food. By the time tobacco plain packaging is established, it will be too late for the others to push back as the precedent will be set.”
The SGF receives 9.7% of its total income from BAT, Imperial Tobacco and PMI and has been very active in opposition to plain packaging proposals. Following the announcement, Public Affairs manager John Lee said “Retailers are angry about the severe penalties outlined in the draft legislation of up to two years imprisonment. More and more this is appearing to be a sham consultation process with a business impact assessment that was not fit for purpose and an outcome that was pre-determined. The UK government seems to have caved into political pressure and the impact on retailers and the illicit trade could be severe.”
On 3 March 2015, Ireland became the first country in the EU to legislate for the plain packaging of tobacco products, making it only the second country in the world thus far to introduce such legislation. Speaking at the vote Senator Paschal Mooney praised the legislation and commented on the opposition of the tobacco industry:
- “I want to compliment the Minister on holding fast and being resolute against very stiff opposition from the tobacco industry…. I want to put on record a couple of the tactics that are being used by the tobacco industry, which most recently, shamefacedly, attempted to intimidate the Minister and this Government by threatening legal action. This is nothing new.”
Senator David Norris echoed this sentiment:
- “I welcome the Bill but I also utterly condemn attempts by sections of the tobacco industry to challenge the right of this national Parliament to pass legislation. It is a monstrous and impertinent intrusion into the proper working of democracy and those people should be thoroughly ashamed. The legal representation aspect is tricky as some of the people involved have had interactions with the State of one kind or another and the advice has not always been terribly good or in the State's interest. The Minister will have to take the Attorney General's advice on this, as lawyers are simply guns for hire. That is the way the law works in our system, and they have to be allowed ply for their trade.”
Commenting on the concerns that illicit trade may increase as a result of the legislation, Senator John Crown stated:
- “I am not even a little concerned about an increase in illegal sales. People who study this know that most of the product which is sold illegally is product that is manufactured legally. It is the companies' product, not some type of counterfeit, knock-off product. All of this craw-thumping, hypocritical breast beating we are hearing from the companies on the issue of smuggling does not resonate true. The reality is that they love smuggling…because the smuggled product is cheap and it is a cheaper way to hook children on cigarettes. They will do anything to make cheaper product available. When we see the internecine webs of convoluted and highly implausible sales routes that have been plotted by the major companies through tiny countries, where cigarettes are being imported in such numbers that it would suggest every citizen down to the lowliest newborn baby is smoking several packs a day, to justify the fact that they are being shunted on to other larger markets via illegal, illicit and smuggling routes, we realise that this is a spurious argument.”
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