Pain Packaging applied to products will affect consumers’ freedom of choice.
May 28, 2014
Consumers International and the World Obesity Federation recently came out lobbying for new regulations on the packaging of foods. In their request for heightened regulation of certain food products they are looking for images to be included on food packaging depicting the “damage caused by obesity.” Said regulations are meant to mimic those of the plain packaging of cigarettes in certain countries. However, despite the good intensions, such regulations are an infringement of intellectual property rights, and a company’s right to effectively brand / differentiate itself from the competition.
The Property Rights Alliance, along with many other free market groups have denounced plain packaging because for multiple reasons including the violations of intellectual property, including trademarks, the impact on various industries internationally, and the harmful economic impacts it inflicts. The issue at hand is not whether or not to educate consumers, but rather the means in which consumer education becomes a clear interference with business and the ability for the consumer to freely choose which products to purchase.
While the proposal being brought by Consumer International and the World Obesity Federation is not blatantly plain packaging, it is the trend that should be of concern for not only businesses but consumers as well. Given the growing trend of support for plain packaging, the requiring of pictures to be placed on certain foods is merely the first step to plain packaging of food products. In order to understand not only how ineffective plain packaging is, but also the negative effects it has on the economy, one must look no further than Australia.
Since December of 2012, cigarette packages have been uniform under the country’s controversial plain packaging law. Aimed at curbing the smoking of cigarettes, making all cigarette packages nearly identical and including graphic images of the side effects of smoking, Australia’s plain packaging laws have been a complete failure. As the Property Rights Alliance has previously outlined, since the introduction of the Law, smoking has increased in Australia. Furthermore as addressed in a post on March 27th, Australia’s Plain Packaging has led to five countries filing challenges through the World Trade Organization for impeding free trade.
Aside from inhibiting international trade, the weakening of intellectual property rights and trademarks, it is undeniable that plain packaging ends up hurting the consumer. Plain packaging by nature reduces the ability of individuals to differentiate and identify products through branding and other means. Furthermore, plain packaging (as seen in Australia) has led to an increase in counterfeit and black market sales of goods. Because of the ease of counterfeiting plain packaged cigarettes in Australia there was a 154% increase in black market counterfeit cigarette sales between June of 2012 and 2013 according to a KPMG report. Similarly, the report claims during the same time period there was an increase of 13.3% in counterfeit tobacco consumption in Australia. These statistics are no coincidence and with the growth of the counterfeit tobacco sales and consumption it has posed a significant threat to consumers whom are often unknowingly consuming counterfeit products because the goods they are consuming are unregulated, leading to the ingestion of potentially more harmful chemicals than already exist in legal cigarettes.
As European countries like the UK, Ireland, and New Zealand are jumping on the Plain Packaging bandwagon, they are ignoring all evidence of effectiveness and legality in the name of principle. The Pain Packaging program has already cost the UK government £200,000 worth of taxpayers’ money according to the Telegraph & Argus. Furthermore with illicit trade of tobacco being worth £3 billion a year, or £8 million a day, Plain Packaging in the UK will in all likelihood lead to even more harmful illicit trade all while costing taxpayers millions and killing businesses and jobs internationally.
If the recent data on Plain Packaging in Australia and projections in other countries shows anything, it is that the proposed regulation for the packaging of foods will have harmful consequences for businesses that could cost many their jobs and also limit the freedoms and rights of consumers, potentially having long-term negative effects on their health.