2017 Set to Become Pivotal Year for War on Plain Packaging

Friday, January 27, 2017 2:59 pm

As French revelers brought in the New Year at the iconic Avenue des Champs-Elysées a disturbing anti-smoking law went into effect- plain packaging. According to the Canadian Cancer SocietyFrance is the third country following the U.K. and Australia to completely remove branding from cigarette packs, Hungary will be fourth setting 2018 to be their logo quit date. As the year starts 14 other countries are considering plain packaging legislation before release of a pivotal WTO report. No doubt health activists will use 2017 to push plain packaging mainstream, at the cost of intellectual property rights.
With the encouragement of the World Health Organization, an agency of the UN, the trend for governments to dissuade consumers by replacing tobacco packaging with health warnings has skyrocketed. In order to comply with the WHO’s Framework Convention on Tobacco Control the number of countries requiring pictorial warnings to cover 50% or more of packs has increased dramatically from 24 in 2008 to 94 in 2016, and to cover at least 30% of packs has increased from 1 in 2001 to 102 in 2016. Three more plan to implement warnings in 2017 already.
The WHO is so serious about ending tobacco consumption that it recently received criticism after issuing a warning to Syria, the country where a civil war has killed 470,000 people, displaced 6.6 million internally and 4.8 million as refugees, to control the use of tobacco there lest anyone die prematurely. Ironically, the WHO might find more cooperation with ISIS which has declared tobacco haram, beheaded one senior official for smoking and burned millions of packs in the city of Raqqa.
The CCS report ranks country’s on their compliance to FCTC measures. This year it gave a pass to Syria (and ISIS) but it did manage to rank the United States dead last (tied with North Korea and 50 other countries) for not requiring any pictorial warnings. Though, in fairness, an asterisk does appear by North Korea as, apparently, an existing decree does require a pictorial warning but to the UN’s ire does not specify size, shape or content.
The FCTC measures require governments to manipulate consumer emotions, habits, and behavior, a.k.a psychological warfare, with the intent to end smoking entirely. These are severe policies requiring reckless government overreach. Fortunately the U.S. has properly avoided being compelled to enact them, but health activists want more. Last year, the tagline of the WHO’s World No Tobacco Day was “Get ready for plain packaging”. It didn’t matter to WHO director Dr. Margret Chan that plain packaging is such a grievous measure it has not made it to the FCTC Convention. It remains outside as a non-binding proposal, so far.
Existing FCTC market interventions that include higher taxes and pictorial warnings come with grave unintended consequences such as funding terrorism and the North Korean nuclear program. Plain packaging: the removal of brand trademarks, however, is on a whole other level of erroneous intervention that only promises to escalate these unplanned effects.
This is because plain packaging attacks property rights, the most fundamental premise of free-exchange in a market economy. Intellectual property rights allow creators to own their own work and exchange it on their own terms. Trademarks and brands, components of intellectual property, allow creators to establish identities in the marketplace to earn reputations and differentiate their products – they allow Apple to stamp all their products with their apple logo and prevent all other competitors from doing the same.
The premise of plain packaging, as put forward in Australia, the first state to implement the measure in 2012, is that branding is a form of advertisement that must be combatted with government advertisements to change consumer behavior. The regulations require every pack to be colored Pantone 448 C (the ugliest color in the world); replace logos and trademarks (because people are defenseless against them) with a standardized font style, size and color; and cover the whole pack with pictures of smoking related diseases that led to early deaths.
This may seem worthwhile at first, severe measures for a severe disease. But, by welcoming the government to decide the economic and health decisions of citizens are wrong and to infringe on intellectual property rights to change them – the government becomes a parent not a rights protector.
This door is a Pandora’s Box. After Australia opened the door for governments to take away intellectual property rights to fit political agendas well intentioned health campaigners have started proposing plain packaging for alcohol and sugary drinks even children’s toys.
Legislators should never give authority to governments to take away rights – especially to curb behavior of its citizens.  Applying the law equally to all, including corporations, not only protects society from unintended consequences, but ensures consumers sit in the driver’s seat of an innovative economy.

As noted above, there are other consequences. When brands can no longer drive prices based on differentiation (such as quality) they turn to driving sales by price decreases, which after all is the only differentiation consumers can now see. The parallel tax hikes recommended by the FCTC create an opening for criminals to buy cigarettes in low-tax areas and make huge profits selling them in high tax areas, robbing state coffers of $6.9 billion in missed revenue. Enterprising criminals, terrorists and North Korea have taken to making their own “cigarettes” and applying counterfeit labels to make even more profits. Free from regulations and with no regard for the consumer health these end up containing much higher concentration of toxins– and their revenues don’t go to anti-smoking programs. In both scenarios the government loses tax revenues, criminals win big, and consumers are hurt.