Tobacco packaging laws could hurt Australian retailers

A women smokes a cigarette during Earth Hour on March 28, 2009 in Sydney, Australia.

Over the weekend, the world’s most restrictive packaging law for cigarettes went into effect in Australia. All tobacco products in the country must now be sold in the same generic package, covered with images of diseases caused by smoking.

The new cigarette packaging may be intended to turn off smokers, but it’s still business as usual at the Freechoice tobacco shop north of Sydney.

"People are still coming in and saying, 'Oh, that’s terrible.' But they’re still smoking," says shopowner Brenda Jones.

She thinks the graphic images haven’t really deterred any of her customers, and the hundreds of look-alike packages have just made it harder for small business owners like her to keep up with stocking shelves and placing orders.

"[It's] very costly; Costly in time and effort. I’m supposed to have gone home at half past two, and I’m still here because I’m still doing orders, because it takes us twice as long to do.”

But the government didn’t intend to make things easier for small business. Health minister Tanya Plibersek says the main goal of the law is to try to get the country’s smoking rate down to just one in ten Australians by 2018.

"Plain packing sends a very strong signal to the tobacco industry that we won’t tolerate this sort of ongoing promotion of tobacco in Australia," she argues.

The industry pulled out all the stops in challenging the law, arguing it violates everything from international trade pacts to intellectual property rights, because it prevents companies from using valuable, long-established logos and trademarks -- like the desert camel or rustic cowboy.

But Australia’s high court rejected those challenges.

Now that the law’s a reality, Scott McIntyre of the country’s largest tobacco company, British American Tobacco, says it’ll only benefit black marketeers.

"We’ve said for a long time now there’s some serious unintended consequences that will flow on from plain packaging," McIntyre argues, "including the growth in the illegal tobacco market.”

And he may be right. Just this morning, Australia’s customs service seized a cargo container filled with more than 10 million smuggled cigarettes. But anti-smoking groups say they’ve heard from smokers who tell them this is just the sort of push needed to help them quit.

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