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Apr 22, 2014

Plain packaging not doing so well

Plain packaging appears to be one of those things that must have seemed like a good idea at the time as a knee jerk reaction by a government that felt the need to be seen to be doing something.
When plain packaging legislation was mooted, it was criticized by the tobacco industry as likely to encourage counterfeiting of cigarettes. This claim was dismissed by the government as ‘big tobacco’ propaganda.
Recent reports indicate that ‘big tobacco’ was right and big government was wrong: 
THE volume of illegal tobacco on the streets of the Sunshine Coast has grown at an alarming rate, according to the results of a new survey. 
Conducted by KPMG UK, the survey looked at the number of discarded illegal cigarette packets on the Coast. 
A sample of 300 packs last year found 6.7% were illegal - up from 0.5% in 2012.The report showed Australia's total consumption of illegal cigarettes had climbed to its highest rate. 
British American Tobacco Australia spokesperson Scott McIntyre said the country's total black market was continuing to boom, with a 20% rise in illegal tobacco since plain packs had been on shelves. 
"If the criminal gangs who illegally imported 2.45 million kilograms of illegal tobacco into the country last year had paid the tobacco excise they should have to the Government, then we would have around $1.1 billion extra in the budget," he said. 
"Due to high excise rates Australia is a very lucrative target for illegal tobacco smugglers and it's made more attractive as there's no real enforcement at the retail level to stop them once they hit the streets. 
"Around 70% of the price of a legal cigarette pack sale goes to the Government in taxes. Criminal gangs obviously don't pay tax, making smuggling illegal cigarettes in from Asia and the Middle East so profitable. 
"It's why dodgy retailers sell illegal cigarettes for around half the price of legal cigarettes.”
The echo chambers of the insular elites ring with self-congratulations at yet another great idea that will stop the great unwashed from harming themselves and make Australians safer in spite of ourselves.  The problem with being insular though, is that you tend to lose touch with the real world and come up with ‘solutions’ that create the opposite effect.
Plain packaging is a boon to those who are prepared to counterfeit the product, while the increases in excise makes the cheaper product even more attractive. 
When will these self righteous idiots ever learn?

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