Netherlands and Canada Plan to Repeat Australia’s Plain Packaging Failure
Canada pushes ahead with banning brands from tobacco products despite harm to IP rights, public opinion, and evidence. Will the Netherlands be different? So far it doesn’t look good.
Plain packaging, the removal of brands and trademarks from tobacco products, has failed to reduce smoking rates in Australia. Yet, that hasn’t stopped Canada from announcing regulations to implement the program there or the Netherlands from initiating a consultation period. The evidence suggests It will fail in both countries, and instead, it will succeed in undermining intellectual property rights which are key to economic growth in flourishing dynamic economies, and may even exacerbate illicit sales of tobacco.
The Dutch government announced the public consultation period of a proposed plain packaging law. Back in 2018 it was leaked to the public that the government intended to institute such a law. Back then it was reported that the rules were devised by a few special interest groups that certainly did not have the best interest of the voters or consumers in mind. Dutch News reported:
“The plans, which have been leaked to the paper, were drawn up by civil servants, anti-smoking groups and healthcare organisations and the tobacco industry itself was not invited to take part in the discussions.”
The regulations amount to a banning of intellectual property rights for tobacco companies. The new regulations will deny their right to use their trademarks by limiting all cigarette packages to the same shape, color, and display of “…only the name of the manufacturer alongside health warnings and photographs,” according to the Dutch Times. The regulations will harm consumers the most as differentiating between brands and more harmful counterfeit cigarettes will become more difficult. The proposed rules will also apply to rolling tobacco and e-cigarettes in 2022.
Hopefully, the consultation process in the Netherlands will be more democratic and open to evidenced based decision making. At the end of the consultation process there, a survey found that 74 percent of Canadians thought tobacco products should remain branded and 64 percent thought the government shouldn’t waste time and resources on it.
To no avail, Health Canada issued its long-awaited plain packaging rules for tobacco, due to take affect November 9th.
Anne Kothawala, president of the Convenience Industry Council of Canada, sharply criticized the new rules:
“Instead of addressing the 20 per cent of tobacco that is sold illegally in Canada, government is adding one more burden to law-abiding retailers who don’t sell to minors, comply with display bans, and partner with government to collect and remit most of the $9 billion in tobacco tax revenue every year.
Following Australia’s example in 2012, the Canadians adopted the same dark brown colored packages, deemed the “ugliest color in the world” by market researchers, which are supposed to convey the message that cigarettes are harmful to your health and difficult to quit.
After Australia adopted plain packaging in 2012, their smoking rates saw a multi-decade decline come to a halt and the total number of smokers has actually increased with the population increase in recent years, according to the 2016 National Drug Strategy Household Survey.
Plain packaging has shown that it not only fails at decreasing smoking rates, but that it may also be connected to increases in illicit sales of tobacco. After Australia adopted plain packaging, illicit tobacco consumption increased by 14 percent.
When fundamental intellectual property protections are removed, the unintended consequences outweigh whatever short-term gain is expected. In the case of plain packaging in Australia, however, not even a reduction in smoking has been attributed to plain packaging. For more on the failure of plain packaging in Australia see our open letter “Five Years of Failure“