Plain Packaging in the UK: Tobacco Company Opposition

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Image 1: Image of proposed plain packs from UK Government website

In the UK, following the March 2011 announcement that the Government was to hold a public consultation on plain packaging for tobacco products, Imperial Tobacco, Japan Tobacco International (JTI), British American Tobacco (BAT) and Philip Morris International (PMI) fought against the policy using a series of arguments which they publicised via:

  • Their corporate websites;
  • Political advertising campaigns;
  • Submissions to the two UK Consultations on plain packaging in 2012 and 2014 respectively;
  • Third-party voices.

Taking each tobacco company in turn, this page highlights some key examples of the aforementioned activities when the UK Government was debating the policy, particularly during the two public consultations, which took place between 16 April 2012 and 10 August 2012 and 26 June 2014 and 7 August 2014. It is not an exhaustive list.

Background

The plain packaging of tobacco products was first suggested in Canada, New Zealand, the UK and Australia in the mid-1980s and early 1990s. Tobacco companies, their associates front groups and allies have been working on a defence strategy against the threat of plain packaging ever since. See the History of Plain Packaging: Developing the Intellectual Property Argument for detailed information on the development of this strategy. Nearly two decades later in 2010, industry analyst Citigroup noted that plain packaging was the “biggest regulatory threat to the industry, as packaging is the most important way tobacco companies have to communicate with the consumer and differentiate their products.”[1] Tobacco companies are aware of how important packaging is to marketing, especially in countries that do not permit any other forms of advertising. For example, a Philip Morris marketing executive stated in 1994:

"In the absence of any other Marketing messages, our packaging -- comprised of the trademark, our design, color and information -- is the sole communicator of our brand essence. Put another way -- when you don't have anything else -- our packaging is our Marketing."[2]

Imperial Tobacco

In 2011, when the UK Government first announced that it would hold a public consultation on plain packaging , Imperial Tobacco held the largest share of the UK cigarette market with 43.1%.[3] During the first consultation in 2012, the company engaged in corporate political advertisingin an attempt to influence the views of the general public and most importantly politicians.

Attempts to Influence the General Public

Imperial produced a YouTube advert called Britain - 2020 Vision?, which misleadingly suggested that by 2020 all perceptibly unhealthy products would be sold in plain packaging.[4] The 2020 Vision advert was promoted on leaflets distributed to the public, with the message "Say NO to plain packs". The leaflets were not openly attributable to Imperial Tobacco or the Hands Off Our Packs campaign, which uploaded the advert to YouTube (see images 2 and 3).

Speaking in May 2012, Imperial CEO, Alison Cooper, stated that plain packaging would be a gift to criminal gangs and terrorists. Cooper said: "Do we really want to hand business like this to gangs in Eastern Europe funding crime and even, in some cases, terrorists?” Reporting on Cooper's remarks, The Sun newspaper ran a sensationalist headline (Image 4). It argued that "groups who benefit from such trade include al-Qaeda and Hezbollah."[5] There is no independent evidence that plain packaging will increase illicit trade, or increase crime or terrorism.[6][7][8]

Attempts to Influence MPs

Imperial also attempted to influence UK MPs’ views on plain packaging. The company funded an advert in The House magazine (a weekly political magazine delivered directly to MPs, Peers, and civil servants), whereby the normal cover pages of the magazine were covered with dark brown/gold plain packaging, with a warning message, mimicking those found on tobacco packets, which read, “WARNING Plain Packaging: Bad for business Good for Criminals” (Image 5).[9] The double-spread cover page did not disclose it was an Imperial Tobacco advertising campaign.

It was only on page 19 of the magazine that a second gold coloured full-page advert explained, in a smaller font than the rest of the text at the bottom of the page and with no explicit link to the cover advert, “This advert has been produced and placed by Imperial Tobacco in association with Asian Trader magazine.”[9]

Imperial Tobacco’s UK 2012 Consultation Response

In Imperial Tobacco’s Submission to the 2012 UK Consultation on standardised packaging, the company put forward the following arguments against the introduction of plain packaging legislation in the UK:

  • No credible evidence or research that plain packaging would reduce smoking prevalence;
  • Plain Packaging would increase the trade in illicit tobacco;
  • The policy would put the Government in breach of national, European and international law;
  • The consultation process was fundamentally flawed;
  • Plain packaging goes against the Government’s principles and objectives.

Click on thumbnails to enlarge.

Imperial Tobacco’s UK 2014 Consultation Response

In its response to the second consultation, the company repeated the above arguments and in addition argued that the policy:[10]

  • Had been ineffective and counterproductive in Australia as:
  • Smoking prevalence had continued in line with previous trends and consumption remained unchanged;
  • Illicit trade had increased according to KPMG;
  • Retailers had been negatively affected.

It also argued that the Chantler review’s conclusions were “partial, speculative and an insufficient basis on which to legislate.”

Launched Legal Action

Following the passage of the legislation in March 2015, Imperial Tobacco and the other three transnational tobacco companies operating in the UK launched legal action against the British Government.[11]

The day before it was due to come in to force on 20 May 2016, the tobacco companies lost their challenge to the UK legislation, allowing the legislation to go ahead.[12] The ruling is currently under appeal by BAT and JTI.[13]

Japan Tobacco International

In 2011, JTI owned the second largest proportion of the UK cigarette market (37.1%).[3] Approximately 24 hours after the British Government announced a 4-week extension to the first consultation on plain packaging on 10 July 2012, JTI launched an anti-plain packaging campaign costing £2 million to “share its views”.[14][15][14]

According to JTI, this spending was to ensure a wide reach of its messages to JTI’s target audience, “both Government and decision makers”. [14] Adverts were included in a number of daily newspapers including The Financial Times and The Guardian (see Image 6 and Image 7).[16] The adverts specifically claimed that the UK Government had considered plain packaging previously and had ‘rejected’ the idea ‘when it was found to have no credible evidence’ for success.[16] The adverts appeared online as well as in print (Image 8).

In September and October 2012, a second wave of the JTI campaign promoted the potential detrimental impacts of plain packaging on the illicit tobacco trade with a knock on effect for small businesses. This wave of advertising consisted of full page adverts in The Financial Times, The Times, The Telegraph, The Guardian and the Evening Standard and ran over a two week period. Martin Southgate, then Managing Director of JTI said that this wave of the campaign “was timed to coincide with the party political conference season”, in order to reach an unprecedented number of MPs and opinion formers.[17] This can be seen as an example of indirect lobbying.

Action for Smoking and Health (UK), ASH Scotland and Cancer Research UK complained to the Advertising Standards Agency (ASA) that the claims made by JTI in both adverts were misleading.[18]

On 13 March 2013, the ASA upheld the complaint pertaining to the first wave of advertising.

“We acknowledged the numerous statements regarding the issue of plain packaging which had been provided by JTI, and which they considered demonstrated both that the Government had rejected the policy in 2008 and that it had done so because it lacked the evidence to support it. However, although the Government had decided not to take forward the proposal for plain packaging in the same way as it did with other measures considered in the consultation, we understood that they had nevertheless intended to keep the measure under review and planned to re-assess it at a later date. We therefore considered that the claims in the adverts that the policy had been ‘rejected’ in 2008 because of a lack of credible evidence gave a misleading impression of the position and action taken at that time by the Government and concluded that the adverts breached the [advertising] code.” [19]

A month later, in April 2013, the ASA ruled that the second set of adverts (September and October 2012) were also misleading. The ASA ruled that JTI could not claim that “the black market in tobacco is booming”. Nor could they claim that the UK had suffered “£3 billion lost in unpaid duty last year”. The ASA noted that this figure was the very upper limit of an estimate of revenue loss by Her Majesty’s Revenue and Customs (HMRC) – in reality the figure was likely to be far lower.[20]

HMRC figures show that the illicit market share for cigarettes in the UK decreased from 15 per cent in 2005-2006 to 7 per cent in 2011-12, (although it subsequently increased slightly to 10 per cent by 2013-2014). At the time, the ruling noted that JTI had themselves acknowledged that the illicit trade in tobacco products has reportedly been a declining trend in the last ten years.

Despite the rulings of the ASA against JTI’s first two waves of advertising, later in April 2013, in response to political speculation that plain packaging would be incorporated into the Government’s legislative programme and announced in the Queen’s Speech in May 2013, JTI launched a third wave of print advertising (Image 9). This time the advert featured a full page 2011 letter from the UK Department of Health to the Australian Government. The letter asked what evidence the Australian Government had to support plain packaging legislation.

JTI’s Managing Director in the UK Jorge da Motta told Packaging News: “We are using this media campaign to demonstrate that in 2011 even the Department of Health accepted that these proposals are not supported by any hard evidence.” However, JTI did not mention that since the time this letter was penned a considerable amount of plain packaging research was conducted both in the UK and elsewhere.

A 2012 systematic review by the Public Health Research Consortium of 37 studies of the potential impacts of plain tobacco packaging found that when branding is removed from tobacco packaging, health warnings are more salient, packs appear less attractive and of a lower quality and there is less confusion about the relative harm from different brands.[21] In March 2015, a series of studies evaluating the impact of plain packaging in Australia were published in the peer-review journal Tobacco Control. For a summary of these studies please visit Countering Industry Arguments Against Plain Packaging: No Evidence Plain Packaging Will Work.

JTI UK 2012 Consultation Response

In Japan Tobacco International’s Submission to the UK 2012 Consultation on standardised packaging the company argued that:

  • There is no evidence that plain packaging will work;
  • The consultation process of the Department of Health is flawed;
  • Plain packaging will have serious unintended consequences.

To support its arguments JTI attached 12 research reports from “independent experts” along with their submission.

“JTI’s views are based on our experience of how competition between branded consumer goods works, our careful review of the documents forming part of the current consultation, as well as the independent opinions of leading experts, whose reports are being submitted with this response.”(p2)[22]

Each of the 12 reports cited in the JTI submission, written by “leading experts” with “independent opinions”, was financially supported by JTI and therefore arguably not independent.[22] This is an example of a well-worn industry tactic of Hiring Independent Experts.

JTI UK 2014 Consultation Response

In its submission to the second consultation in 2014, JTI made some additional arguments against the policy.[23] JTI argued that the Department of Health and the Government had:

  • Moved the goal posts by changing the preconditions for legislation. The company cited EU Better Regulation principles, saying that there needs to be “robust and compelling evidence” before regulating;
  • Lowered the bar for evidence by asking whether plain packaging “is likely to have an effect on public health” rather than it ‘’’will’’’ have an effect;.
  • Ignored the fact that there was no evidence of a positive impact in Australia; The company argued that:
- Ashok Kaul and Michael Wolf had found no effect of the legislation;
- London Economics had found no effect of the legislation;
- Underage smoking increased, according to Australian Government data;
- KPMG said the illicit market grew by 2.1% in the year after the policy’s implementation.

Kaul and Wolf, London Economics and KPMG all conducted research that was funded by tobacco companies and each has a profile on TobaccoTactics.org. The contract between Philip Morris and Kaul and Wolf included a clause allowing PMI to read and suggest changes to the research.

“University agrees that, prior to submission to publisher of a manuscript describing the results for publication, University shall forward to PMIM 30 days prior to planned publication a copy of the manuscript to be submitted to PMIM for review and comments and University will take into account in good faith the said comments.”

Furthermore, the Australian Government data found a significant decrease in smoking prevalence among daily smokers aged 14 and over from 15.9% in 2010 to 13.3% in 2013.[24] For continued updates on smoking prevalence in Australia click here

JTI also argued that the Government:

  • Should not use layered regulations in contradiction to Better Regulation Principles because the Point of Sale Display Ban had not yet been fully implemented and neither had the EU Tobacco Products Directive Revision;
  • Had failed to assess the true impacts such as the risk to illicit trade and the impact on foreign investment in the UK;
  • Had not adequately considered that plain packaging is unlawful as tobacco companies’ assets are protected by UK, European and International law unless JTI is compensated for the full value of its brands.

On 26 May 2015, JTI filed a High Court action against the UK Government on the basis that plain packaging infringed the UK’s obligations under World Trade Organization rules.[25] The company lost its legal challenge on 19 May 2016.[12] JTI is undertaking an appeal against the High Court ruling.[26]

British American Tobacco

In 2011, BAT owned 8.1% of the UK cigarette market.[3] BAT did not take out adverts in its own name in the UK, like it did in New Zealand where it owns over 80% of the market share in cigarettes, nevertheless the company has actively lobbied against plain packaging in the UK.

However, BAT did create two emotive You Tube adverts to suggest that plain packaging would increase illicit trade and consequently increase organised crime, including sex trafficking and terrorism.[27][28]

BAT’s UK 2012 Consultation Response

British American Tobacco’s Submission to the UK 2012 Consultation on standardised packaging argued that plain packaging would:

  • Not be effective in reducing smoking prevalence as tobacco packaging is not a relevant factors in people’s decision to smoke or quit;
  • Exacerbate the significant illicit trade problem in the UK;
  • Lower cigarette prices, thereby increasing smoking, reducing Government revenue and harming small businesses;
  • Breach UK, EU and international laws and agreements and “constitute a wholesale expropriation of BAT’s valuable intellectual property” costing the Government significant compensation.

BAT also criticised the Department of Health for not considering the “relevant research”, claiming instead that it relied on insufficient and unreliable evidence and that it failed to demonstrate that the benefits would outweigh the adverse consequences.

See BAT Funded Lobbying Against Plain Packaging for BAT’s lobbying activities in the UK, Australia and New Zealand, including its funding of third-party campaigns against plain packaging.

BAT’s UK 2014 Consultation Response

In its submission to the second consultation in 2014, BAT made some additional arguments, including:[29]

  • The Government followed a flawed process and “appears to have already decided to introduce plain packaging”;
  • Evidence from Australia shows that plain packaging has not achieved its objectives;
  • The Chantler Review provided no new evidence and was not independent because it relied on expert opinions from “avowedly conflicted tobacco-control advocates whose opinions are inconsistent with actual data from Australia”;
  • Government attempted to justify the consultation by saying it urgently needed to avoid future health consequences – why the sudden urgency after considering the policy for 6 years and in the absence of evidence that plain packaging will lead to health benefits;
  • Plain packaging is irrational because it violates fundamental rights and disproportionate because the Government failed to demonstrate that the policy is necessary, adequate and proportionate;
  • The policy will have serious adverse consequences, including:
  • Exacerbating a serious illicit trade problem in the UK;
  • Stimulating price competition which may perversely lead to an increase in consumption;
  • Raising barriers to entry;
  • Harming small retailers;
  • Stifling innovation;
  • Reducing consumer choice.

On 22 May 2015, after the UK Government voted in favour of plain packaging regulations, BAT filed an unsuccessful lawsuit against them.[30][12] BAT is appealing against the High Court ruling[31]

Philip Morris International

PMI, the largest transnational tobacco company in the world, owned approximately 8% of the UK market share in cigarettes in 2011.[3] Nevertheless, PMI engaged in extensive lobbying activity in the UK – most notably pushing the so-called “illicit trade” argument.

In 2013, PMI published its annual “Project Star” report (produced by KPMG) several months earlier than it had done in previous years. Given that the results suggested that illicit trade increased by a quarter of the legal market compared to the fourth quarter of 2012, the early publication could be seen as a deliberate attempt to influence the outcome of the consultation. Project Star’s findings were in direct contradiction to official figures suggesting that illicit trade in the UK was at that time decreasing. [32]

Furthermore, the Project Star report was “traditionally agreed with OLAF (EU anti-fraud office) and member states in advance of publication but this year’s [2013] had not been. [33]

PMI also employed the public relations firm Luther Pendragon to try and create a grassroots rebellion amongst UK MPs, but the PR firm severed its ties with the company following criticism from leading health organisations. PMI replaced Luther Pendragon with a deal with the Crosby Textor Group and lobbyist Lynton Crosby in November 2012. This was an extremely controversial appointment as Crosby had also been appointed as a political advisor to the Conservative Party that very same month.[34]

Furthermore, leaked PMI documents including internal corporate presentations from 2012 revealed that the company had meticulously planned an extensive multifaceted public relations campaign against Plain Packaging in the UK, including a highly detailed media campaign, a strategy to mobilise opposition from retailers, and scaremonger about illicit trade and detailed political analysis of the best ways to prevent the implementation of the policy. See below for links to other pages on the leaked PMI documents:

PMI UK 2012 Consultation Response

Philip Morris’ Submission to the UK’s 2012 Consultation on standardised packaging argued that:

  • The evidence does not meet the standards set by the Department of Health and PMI only supports regulation proven to be effective in reducing youth smoking;

It, like the other three companies insisted that plain packaging will:

  • …not reduce youth smoking and may actually encourage it;
  • …not make it easier to quit smoking;
  • …increase the level of illicit tobacco in the UK;
  • …require the Government to compensate tobacco companies, costing taxpayers billions.

PMI UK 2014 Consultation Response

In addition to the arguments PMI made during the first consultation, PMI’s submission to the second consultation[35] argued that the Department of Health’s policy proposal may not be lawful because:

  • It did not offer any compensation to tobacco companies;
  • It did not address whether plain packaging complied with the EU’s Community Trademark Regulation, which gives trademark owners the right to use Community trademarks throughout the EU;
  • Tobacco companies were challenging the EU Tobacco Products Directive and if successful, the UK may not have legal authority to implement plain packaging;
  • It interferes with tobacco companies’ fundamental rights and freedoms.

Its opening paragraph stated:

“ ‘Standardised packaging’ is a euphemism for Government-mandated destruction of property. It is unlawful, disproportionate, and at odds with the most basic requirements of the rule of law. Philip Morris International respectfully encourages the Department of Health to honor [sic] the UK principles of sound policy and reject ‘standardised packaging’ in favor [sic] of legally sound alternatives. If necessary, however, PMI is prepared to protect its rights in the courts and to seek fair compensation for the value of its property.”

On 22 May 2015, on the same day as BAT, PMI also filed a lawsuit against the UK Government.[36] On 19 May 2016, Justice Green ruled against all four tobacco company challenges to the legislation.[12] PMI decided not to appeal the ruling.[37]

Tobacco Companies Used the Third-Party Technique

Each of the big four tobacco companies presented evidence to support their arguments in their submissions to the plain packaging consultations. This evidence took a number of forms, from peer-reviewed journal articles, to tobacco industry funded reports, to the opinions of trade organisations, MPs and police officers. A significant proportion of the people and organisations were either entirely industry-funded or industry-linked through membership fees, research funding or vested interests.[38]

Commissioning Experts and Reports to Support their Case Against Plain Packaging

Throughout the plain packaging debate, tobacco companies commissioned individuals and organisations to produce reports that the companies subsequently used to influence the evidence base surrounding plain packaging and argue against the implementation of the policy.

Funding Anti-Plain Packaging Campaigns

Tobacco companies provided funding for third party campaigns against plain packaging, such as the Forest run Hands Off Our Packs campaign and the Tobacco Retailers Alliance postcard campaign.

Building Relationships with International Business Organisations

Plain Packaging has become a global issue, with many countries worldwide considering its implementation. International Business Organisations with tobacco company members have lobbied against implementation of plain packaging in the UK.

TobaccoTactics Resources

See Countering Industry Arguments against Plain Packaging for the public health counter arguments to the company arguments above.

TCRG Research

Notes

  1. P. Smith, P. Kwan Yuk, Australia plans cigarette packet branding ban, The Financial Times, 29 April 2010
  2. M. Hulit, Marketing Issues Corporate Affairs Conference, Philip Morris, Manila, 27 May 1994
  3. 3.0 3.1 3.2 3.3 Euromonitor International, Company shares by Global Brand Owner Historic UK 2011
  4. Imperial Tobacco, Britain 2020 Vision uploaded to You Tube by HandsOffOurPacks 1 May 2012, accessed July 2012
  5. S. Hawkes, "Fag packet ban 'boosts terror' - Move is ‘gift to black market’ says boss”, The Sun, 25 May 2012
  6. L. Joossens, Smuggling, the Tobacco Industry and Plain Packs, Cancer Research UK, November 2012
  7. M. Scollo, M. Bayly, M. Wakefield. Availability of illicit tobacco in small retail outlets before and after the implementation of Australian plain packaging legislation, Tobacco Control, 2014; doi:10.1136/tobaccocontrol-2013-051353, accessed May 2014
  8. M. Scollo, M. Zacher, K. Coomber et al. Use of illicit tobacco following introduction of standardised packaging of tobacco products in Australia: results from a national cross-sectional survey. Tobacco Control, 2015:24:ii76-81
  9. 9.0 9.1 “The House”, Parliament’s Magazine, Dods, No.1419, Vol 36, 14 June 2012
  10. Imperial Tobacco, Illegal, unnecessary and damaging for UK Plc: Why standardised packaging is a bad policy idea that would not work. A response to the Department of Health consultation on standardised packaging of tobacco products, 7 August 2014
  11. A.Ram, Tobacco giants launch UK packaging challenge, The Financial Times, 8 December 2015, accessed April 2016
  12. 12.0 12.1 12.2 12.3 British American Tobacco, Philip Morris, Japan Tobacco International and Imperial Tobacco against Secretary of State for Health, Royal Courts of Justice, 19 May 2016, accessed July 2016
  13. F Washtell, Big tobacco firms aim to stub out new plain packaging laws via appeal, CityAM, 22 May 2016 (accessed October 2016)
  14. 14.0 14.1 14.2 Japan Tobacco International Challenging UK ‘plain’ cigarette packs, accessed July 2012
  15. The Grocer, JTI takes aim at "flawed" dialogue on plain packaging, 6 July 2012, accessed July 2012
  16. 16.0 16.1 ”The Financial Times”, It’s not worth the paper it’s written on, 10th July 2012, p5
  17. Asian Trader, Full page adverts in national warn of dangers of plain packaging, 22 October 2012, accessed October 2012
  18. M. Sweney, ASH and Cancer Research win ban on adverts attacking plain cigarette packs, 13 March 2012, accessed March 2013
  19. Advertising Standards Agency, ASA adjudication on Gallaher Ltd, 13 March 2013, accessed March 2013
  20. Cancer Research UK, Further adverts from Japan Tobacco International ruled misleading, Press release, 17 April 2013, accessed May 2013
  21. Public Health Research Consortium, Plain Packaging: a systematic review, November 2012, accessed May 2013
  22. 22.0 22.1 JTI,Japan Tobacco International’s Submission to the UK Consultation on standardised packaging, August 2012, accessed June 2013
  23. JTI, JTI’s response to the UK Department of Health’s consultation on the introduction of regulations for standardised packaging of tobacco products, 6 August 2014
  24. Cancer Council Victoria, Questions and answers on plain packaging in Australia. Fact sheet no.4: What is happening to the prevalence of smoking in Australia?, accessed December 2015
  25. T. Corbin, Anti-plain pack legal action grows as JTI files suit, Packaging News, 27 May 2015, accessed April 2016
  26. Japan Tobacco International, JTI will appeal plain packaging court decision, 19 May 2016 (accessed October 2016)
  27. BAT, This is the man, accessed June 2012
  28. BAT, Who’s in Control?, accessed June 2012
  29. British American Tobacco, Consultation on the introduction of regulations for the standardised packaging of tobacco products, Response of British American Tobacco UK Limited, 7 August 2014, accessed July 2016
  30. P. Evans, Philip Morris, British American Tobacco Challenges U.K. Cigarette-Packaging Order, The Wall Street Journal, 22 May 2015, accessed July 2016
  31. British American Tobacco, Plain packaging, 2016 (accessed October 2016)
  32. HMRC, Measuring Tax Gaps 2012, Tax gap estimates for 2010-11, 18 October 2012, accessed June 2013
  33. A. Ralph, Anti-fraud office fuming over British American Tobacco’s survey claim, The Times, 27 May 2013
  34. J. Doward, David Cameron urged to probe claim that aide had £6m tobacco deal, The Observer, 20 July 2013, accessed May 2016
  35. Philip Morris Limited, Response to the Consultation on “Standardised Packaging”, 7 August 2014
  36. P. Evans, Philip Morris, British American Tobacco Challenges U.K. Cigarette-Packaging Order, The Wall Street Journal, 22 May 2015, accessed July 2016
  37. Philip Morris International, News release: Philip Morris International comments on English court’s plain packaging decision, 19 May 2016 (accessed October 2016)
  38. K. A. Evans-Reeves, J. L. Hatchard, A. Gilmore, ‘It will harm business and increase illicit trade’: an evaluation of the relevance, quality and transparency of evidence submitted by transnational tobacco companies to the UK consultation on standardised packaging 2012, Tobacco Control, 2015,24(e2):e168-e177