Ireland’s Potentially Catastrophic Plain Packaging Law Could and Should Be Vetoed By EU
Jun 24, 2014
Recently Ireland became the first country in the EU to approve plain packaging of cigarettes. Ireland’s decision to move forward with plain packaging is deeply concerning and will likely lead to tremendous problems for Ireland and the international community if it is implemented. However, before plain packaging can be made official it must be approved by the European Union where it is believed that it will luckily be struck down by some countries due to its correctly interpreted infringement upon intellectual property according to an article in theIrish Independent. Therefore, there is still hope that Ireland’s overzealous law will be struck down by the EU and the negative externalities associated with plain packaging can be avoided.
There is growing evidence that plain packaging is not only ineffective in curbing the sale and consumption of cigarettes, but rather evidence showing that it actually leads to an increase in sales and consumption of cigarettes. Multiple studies and reports show that Plain Packaging in Australia has led to substantial increases in the consumption and sales of cigarettes. After a four year downward trend of cigarette consumption, in the course of one year that plain packaging has been in effect, cigarette consumption grew in Australia.
Ireland has long been considered a conducive business environment for many international businesses, however if implemented, plain packaging poses to threaten the business friendly reputation of Ireland. Plain packaging prevents companies from using any form of branding. Such policy compromises trademarks and intellectual properties of the affected companies. Furthermore, due to the threats plain packaging poses to intellectual property corporations are acknowledging that this new controversial policy could send an, “adverse message to Irish companies and foreign investors.”
Intellectual Property, and branding specifically is becoming an increasingly important for companies. For example, according to the World Intellectual Property Report, “investment in branding stands at USD $340 billion in 2010 for the U.S. alone…” If Ireland continues to pursue plain packaging, Ireland will be sending a clear message to companies that it does not value to protection of companies’ right to brand themselves and differentiate themselves from competitors. In doing so Ireland will threaten many jobs and hurt its own and entire global economy. According to a study by Roland Berger Strategy Consultants, plain packaging will threaten 1,900 jobs and €125 million in tax revenues. In fact this report states that “88% of all expected job losses (1,672 jobs) are expected to occur in various interconnected sectors due to a decrease in tax revenue and stifled growth in the Irish economy.”