Retailers will pay the price of plain tobacco packs, Petrol Retailers Association poll shows

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Retailers are increasingly opposed to Government proposals to introduce plain packaging of tobacco products in the wake of evidence from Australia, a new poll reveals.

In the week that an independent review into plain packaging is due to report, the Populus poll undertaken for the Petrol Retailers Association reveals:

  • 73%of retailers say plain packaging would hurt their businesses, up from 65% last year
  • 90% believe direct tobacco sales are important to their bottom line, up 11-points from last year
  • 79% believe it would cause people to turn to the black market, where they can access cheap,
  • branded packs
  • Nine in 10 people (89%) say it would make counterfeiting easier

In a sign of the growing pressure on government to abandon consideration of plain packaging, 84% of retailers surveyed said implementing plain packs would go against the Government’s pledge to help small business.

Brian Madderson, chairman of the PRA, said: “Retailers already feel abandoned by a government that promised to help business but has instead unleashed a blizzard of new regulations, leaving them to foot the bill.

“Small retailers are facing the cost of introducing the point of sale display ban next year, so it is absurd that the government might now adopt plain packaging when there is not a shred of evidence that it would reduce smoking rates.

“The more retailers hear about the impact of plain packaging in Australia, which is the only country to experiment with the measure, the more opposed they are to seeing it introduced in the UK. Retailers are unanimous in their belief that the Governmentshould fully evaluate the Australian experiment before implementing plain packaging here.”

The concerns expressed by retailers in the UK have been reinforced by the experience of retailers in Australia, the only country to experiment with plain packaging.

According to the Australasian Association of Convenience Stores (AACS), 70% of retailers have been negatively affected by plain packaging, with 67% saying that the growth of the black market has had an impact on their business since plain packaging was introduced.

These findings, shared with the Petrol Retailers Association, were part of a report entitled The Impact of Plain Packaging on Australian Small Retailers, which was conducted by leading international research company Roy Morgan.

AACS CEO Jeff Rogut said: “We would urge the UK not to make the same mistake as Australia by adopting plain packaging. The spike in costs to retailers from plain packaging, combined with a booming illegal trade is having a dramatic effect, with retailers being forced to absorb additional costs at the same time as losing customers to the black market.”

In Australia, legitimate retailers are losing business to illegal sales of branded illicit packs at a fraction of the cost of legal plain packs. This was highlighted by the media in Australia last year.

The surge in illicit trade has been so big that illegal brand ‘Manchester’ is now outselling legal brands such as Camel. In some cases, retailers are losing up to AUS $15,000 a week to the black market, whilst the Australian Treasury lost AUS$1.1bn to the illicit trade in cigarettes last year.

Madderson said: “The experiences of retailers in Australia serve to reinforce the need for a thorough impact assessment before this policy goes any further and this must include a full evaluation of Australia’s experiment with plain packs.”