Thailand Repeats Australia’s Plain Packaging Mistake

The government of Thailand, as of September 12th, has become the first country in Southeast Asia to mandate plain packaging on cigarette packs. The move has come as a part of the Thai government’s initiative to reduce smoking prevalence. Unfortunately, results from other countries that have implemented the policy such as Australia, the UK, and France aren’t promising. Instead, the most prevalent result may in fact be growth of the illicit cigarette market and a steep downgrade of intellectual property protections.

Plain packaging has failed in Australia, the first country to institute the policy in 2012. In the most recent National Drug Strategy Household Survey, the government reported that for the first-time in two decades “the daily smoking rate did not significantly decline over the most recent 3-year period.” Also in France, the French Minister of Health, Agnès Buzyn, stated in the National Assembly that the “official sales of cigarettes increased in France, the neutral package did not reduce the official sale of tobacco.”

There is virtually no evidence that plain packaging contributes to reduced smoking rates in its 7 years of practice. In fact, the WHO only references one study that claims plain packaging does lower smoking incidence. In its 2019 Tobacco Epidemic report they leave out that the authors of that study declared “confidence in this finding is limited, due to the nature of the evidence available, and is therefore rated low by GRADE standards.”

Most important, by forcing all cigarette packages to have the same exteriors, the Thai government is stripping companies of their ability to be known by their work, a serious blow to intellectual property rights and consumer safety. The measure also forces consumers to commoditize the products, to effectively see and treat all cigarette products the same- regardless of their legality or health differences. Again, the example of Australia is illustrative. There, illegal tobacco consumption has actually grown since plain packaging came into effect, and roughly constituted 13.9% of all consumption in 2016. Similarly, in France, the illicit trade of tobacco cost the government over 2 billion euros in 2016.

Even if it did work, stripping companies from using their IP assets, even in the name of public health, establishes a dangerous precedent. The drinks industry, soda and alcohol, as well as snack makers, have all been targeted for plain packaging as well. These industries hold the world’s most valuable brands and employ millions across the world. Brand valuation experts Brand Finance estimated the total cost of plain packaging, if applied to only to the beverage industries, would amount to an estimated loss of $293 billion.

As a United Nations organization, the WHO should be on the other side of the issue. Depriving companies of their IP rights goes against the United Nations’ Declaration of Human Rights, which calls for the right to protect one’s material interests i.e. the right to express and share one’s individual creations with the knowledge that said creations will not be subject to any usage without their consent.

Thailand, especially, has a lot to gain from protecting intellectual property rights and a lot to lose if current protections become even more lax. Frontier economics, a consultancy firm, found that in Thailand the trademark-intensive sector is responsible for 40 percent of the nation’s GDP, 14 percent of employment, and 60 percent of its exports. Simply, Thailand is awash with trademark businesses such as restaurants, travel services, and local drink makers. Unfortunately, according to the International Property Rights Index Thailand has hardly improved its ranking in IP protections from 4.4 in 2007 to 4.5 in 2018. Immense value can be found if only IP protections could be encouraged.

The setback for innovation cannot be understated. No one can estimate the value of innovation or investment that won’t occur as a result of removing the incentive for brands to build a relationship with consumers. It is unfortunate to see that the Thai government is taking steps backwards from protecting IP rights.

Photo Credit : Doronko