Scottish Grocers' Federation

From TobaccoTactics
Share/Save/Bookmark
Jump to: navigation, search

According to its website, the Scottish Grocers’ Federation (SGF) is the authoritative voice for the [convenience store] trade to both policy makers and the media.[1]

The Federation brings together retailers throughout Scotland, from most of the Scottish Co-operative, SPAR, Scotmid, Nisa, Keystore, Costcutter, Martin McColl, Premier, Day Todays and local independents.

Membership and Funding

SGF is funded by the membership contributions of retailers and suppliers. In 2014, of the 37 suppliers which financially support SGF, three are tobacco manufacturers; namely, Imperial Tobacco, British American Tobacco (BAT) and Philip Morris International (PMI). Combined, their total contribution accounts for 9.7 per cent of the total income it derives from supplier memberships. SGF states that all SGF policy decisions are decided by our National Executive Board which is made up entirely of retail members with no suppliers represented.[2]

By 2016, JTI had become a "platinum" member of the SGF, with Imperial a "Gold" member and BAT a "Silver" member. [3]

Against Plain Packaging

In September 2013, despite the UK Government’s announcement in July that it would not be proceeding with plain packaging at the present time, the Scottish Government announced that it would continue with plans to introduce the legislation in Scotland. A public consultation is scheduled for 2014 which could lead to the implementation of legislation either the same year or in 2015.

SGF has opposed plain packaging legislation proposals in the UK. The Federation submitted a detailed response to the UK consultation in 2012.[4][2]

In its submission SGF claimed that the nearly 2,000 stores that it includes in its membership employ approximately 32,000 people across Scotland with annual sales in excess of £3.2bn. It continued that Tobacco constitutes an important part of this economic output accounting for approximately 21% of turnover for the average convenience stores with profits ranging from 5%(economy brands) to 8% (premium brands).[2] SGF’s figures are based on an approximate self-calculation whereby the profit margin for a premium brand is £0.56 and £0.26 for an economy brand.

The arguments cited by SGF are extensive and replicate those promoted by the tobacco industry.

  • “The evidence base supporting change is neither robust nor unequivocal”;
  • Packaging is not why young people smoke, the reasons “are more deep rooted and more intractable: family background and socio-economic situations are far more significant than brand awareness”;
  • Smokers will down trade to cheaper brands. SGF argues that this will lead to a loss of profits of “around £1.7m” if there is a 1% shift and that this would increase to £16.7m and £83.5m for a 10% and 50% shift respectively;
  • Plain packaging will make it easier to counterfeit tobacco products, “which are more prevalent in lower income, price sensitive and disadvantaged areas where smokers will be driven out of legal and responsible premised selling regulated products to an illegal, irresponsible and unregulated market”;
  • Cross-border shopping will increase among those who wish to continue smoking branded products;
  • Legality of plain packaging is unclear. “Pursuing a policy of such legal uncertainty would be detrimental to the retail sector given the difficult economic climate and the substantial regulatory burden and cost involved with the policy”;
  • Transaction times will increase because packaging will have fewer distinguishing features;
  • Not enough time has been given to allow other legislative and price-based tobacco control measures to take effect.

SGF also claims that plain packaging will make cleaning, replenishing and stocktaking more arduous thereby requiring additional resources form retailers to compensate.

SGF submitted another response to the second UK Consultation which took place in 2014.[5]

Promoting the Illicit Trade Story

In its submission to the UK consultation, SGF stated that world-wide the illicit trade is growing and within the European Union illicit trade increased from 2007 to 2009. However, UK data from Her Majesty’s Revenue and Customs (HMRC) show a decline in illicit trade of cigarettes between 2003/4 and 2011.[6]

Following the publication of a report by the accountancy firm KPMG [7] in November 2013, which argued that in the 12 months to June the percentage of illicit had increased from 11.8 % to 13.3% in Australia, SGF’s Chief Executive, John Drummond urged:

the Scottish Government to carefully reflect on KPMG’s findings ahead of their planned consultation. It would not be wise to press ahead with a policy which will exacerbate the already prevalent illicit trade in Scotland.[8]

The SGF had also replied to the Coalition Government’s consultation on plain packaging warning of: “a number of serious and valid concerns about the introduction of standardised packaging which cumulatively amount to a significant administrative and financial burden on business”.

Once again, many of these repeated long-used tobacco industry arguments and language, such as on illicit. For example, Drummond, called plain packing a “smugglers charter”. [9]

The KPMG report was paid for by BAT, Imperial and PMI and was dismissed by public health organisations in Australia. Paul Grogan, Director of advocacy at the Cancer Council Australia, said: “This is the latest in a long line of tobacco industry reports released to try to undermine good public health policy. When previous reports based on industry data have been independently analysed, they have been shown to be gross exaggerations.” [10] Research published in the UK in 2013 has questioned the reliability of KPMG project star reports which estimate the European illicit trade on behalf of PMI. The authors call for greater transparency, external scrutiny and use of independent data when assessing the extent of the illicit trade in Europe.[11]

In the lead up to the Scottish Consultation on plain packaging, SGF has continued its active opposition to the policy. On 18 February 2014, SGF once again cited KPMG research attributing plain packaging to a 154% increase in the sale of illegal branded cigarettes.

SGF also stated that research by the Australasian Association of Convenience Stores (AACS) revealed that 70% of retailers have been negatively affected by plain packaging and 67% saying that the growth in illicit trade has had an impact on their business since the policy was introduced in Australia.[12]

However, the original press release from AACS states contradictory findings,[13] on the one hand it says,

the actual volume of tobacco sold by convenience stores in Australia remain stable, with some reporting an increase in tobacco sales since plain packaging was introduced.

But in the same article it is reported that:

The research shows more than four in ten retailers perceive illicit trade to be having a negative impact on their business.
BAT UK Consultation submission cites support from SGF that plain packaging is burdensome (Source: Talking Retail, Independent Newsagents fear boost to illicit trade from plain packaging. 16 April 2012)

SGF Cited in BAT’s Submission to the UK Consultation on Standardised Packaging

In its submission to the UK Consultation on plain packaging, [BAT] argued, among other things, that the policy was an example of Burdensome over-regulation. [14] The company argues that retailers are already bearing the significant costs of compliance with point of sale display ban regulations and that plain packaging legislation would require retailers to spend even more on training and security to comply with yet another type of regulation.

To support its ‘burdensome’ argument BAT cited a quote from the SGF (see image).

SGF Submitted Evidence to Chantler Review

In its submission to the UK’ Government’s Chantler Review, in January 2014, the SGF reiterated many of the tobacco industry arguments against plain packaging, including that it would breach intellectual property of the tobacco companies, and increase the threat of illicit.

Like the tobacco companies, the SGF attacked the Systematic Review undertaken by academics for the Department of Health examining the evidence for plain packaging. It also criticised recent research in Australia which showed that after the introduction of plain packaging some smokers had “perceived their tobacco to be of lower quality and less satisfying” and were thinking about quitting. [15]

Government Has "Caved into Political Pressure"

Following the Government's January 2015 announcement that it was to vote on draft regulations for plain packaging, SGF Public Affairs manager John Lee said:

“Retailers are angry about the severe penalties outlined in the draft legislation of up to two years imprisonment. More and more this is appearing to be a sham consultation process with a business impact assessment that was not fit for purpose and an outcome that was pre-determined. The UK government seems to have caved into political pressure and the impact on retailers and the illicit trade could be severe.” [16]

Related Pages

Notes

  1. Scottish Grocers’ Federation, About SGF, accessed February 2014
  2. 2.0 2.1 2.2 SGF, Standardised packaging of tobacco products. Consultation response from the Scottish Grocers’ Federation, undated, accessed February 2014
  3. Scottish Grocers Federation, Corporate Members, Scottish Grocers Federation website, accessed June 2016
  4. Department of Health Tobacco Programme, Consultation on standardised packaging of tobacco products: Summary report, July 2013, accessed August 2013
  5. J. Lee, Consultation on the Introduction of Regulations for Standardised Packaging of Tobacco Products, Scottish Grocers’ Federation, August 2014, accessed August 2016
  6. HMRC, Measuring tax gaps tables 2012, accessed February 2014
  7. KPMG, Illicit Tobacco in Australia, October 2013, accessed February 2014
  8. SGF, Plain Packaging Adds to Rise in Illicit Trade, 7 November 2013
  9. SGF, UK Consultation on Tobacco Plain Packaging, 13 April 2012, accessed February 2014
  10. Paul Farrell, Illegal tobacco consumption increases, survey funded by cigarette firms says SW Cancer Council spokesman calls research 'latest in a long line' of reports aimed at undermining good public health policy, The Guardian, 4 November 2013, accessed February 2014
  11. A. Gilmore, A. Rowell, S. Gallus, A. Lugo, L. Joossens, M.Sims, Towards a greater understanding of the illicit tobacco trade in Europe: a review of the PMI funded ‘Project Star’ report, Tobacco Control, doi:10.1136/tobaccocontrol-2013-051240
  12. SGF, Scottish Retailers urged ‘not to make the same mistake as Australia by adopting plain packaging’, Talking Retail, 18 February 2014, accessed February 2014
  13. Australasian Association of Convenience Stores, Plain packaging: Negative impact on retailers plain to see, AACS press release, 11 February 2014, accessed February 2014
  14. BAT, UK standardised packaging consultation: Response of British American Tobacco UK Limited, 8 August 2012
  15. John Lee, The Independent Review on Standardised Packaging of Tobacco Products, Scottish Grocers’ Federation, January 2014
  16. Talking Retail, Plain cigarette packaging proposals: Industry response, 22 January 2015, accessed February 2015