Scotland Plain Packaging: Scaremongering over Illicit Tobacco

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In September 2013, the Scottish Government announced that it would press ahead with plans to introduce plain packaging.
Also see:

* Plain Packaging Opposition in Scotland

* Legal Threats

* Will O’Reilly

By the summer of 2013, the industry and its front organisations had already started scaremongering over illicit tobacco and cigarettes in Scotland. In doing so, they were repeating well-trodden arguments that the industry had used in Australia and the rest of the UK.

* Plain Packaging in the UK

* Smuggling and Illicit Trade Threats

What the industry and its supporters were worried about was that the Scottish government was going to press ahead with plain packaging, even if the Westminster government rejected the idea.
The month before the Minister for Public Health, Michael Matheson’s announcement, in August 2013, the Tobacco Retailers’ Alliance published a survey arguing that tobacco smuggling had left “one in 10 corner shops under threat of closure”.1
ASH Scotland pointed out that if 92 retailers in Scotland had responded to the survey, this meant that only nine retailers in the country felt that illicit was a threat.2
That same month, research undertaken by the Centre for Economics and Business Research for Philip Morris International (PMI) was published. It argued that over 3000 jobs and some 700 small independent shops across Scotland could be axed due to the introduction of plain packaging.3
Once again this research was rebutted by ASH Scotland, which argued that “The main assumptions underlying the analysis were taken from other tobacco industry funded reports,” leading to “flawed assumptions” backing the report up.4
The CEBR research was the start of a multi-faceted campaign by PMI to derail plain packaging in Scotland. Again the illicit argument was central to this. Part of this plan was using the ex-Policeman, Will O’Reilly, to appear in numerous press articles across Scotland, warning of the threat of illicit tobacco.

PMI Uses Australia Study on Increased Trade in Illicit to Try and Derail Legislation

Halogen Press Release

In November 2013, the accountancy firm KPMG published a report which argued that in the 12 months to June the percentage of illicit had increased from 11.8 % to 13.3% in Australia. The report contended that the “key driver of this growth has been a large increase in the consumption of illicit manufactured cigarettes, primarily in the form of contraband”.5
The report, which was paid for by British American Tobacco,Imperial Tobacco and PMI, was dismissed by public health organisations in the country. 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.”6
A PR company paid by PMI, Halogen Communications, was quick to send out a press release, arguing that the Australian report “should give Scottish Government pause for thought”.7
This PR message is exactly the same as PMI had pushed in England.

PM Lobbied Scottish MPs with the KPMG Report

On 13 November 2013, Eoin Dardis, from Philip Morris, wrote to Members of the Scottish Parliament (MSPs) with findings of the aforementioned KPMG research, arguing that it was imperative that the Scottish government “carefully consider these important findings from Australia”.8 He then advised MSPs to contact Halogen for more information.
A letter was also sent by PMI on the same day to Scottish Public Health Minister, Michael Matheson, with the KPMG research.9
A day later, on the 14 November 2013, the Conservative MSP Jackson Carlaw, put forward a motion which showed that the PMI and retailer campaign was having some success in the Scottish Parliament. The motion read:

The Parliament notes the recent report by KPMG, Illicit tobacco in Australia, which finds that the level of illicit tobacco consumption has risen from 11.8% to 13.3% of total tobacco consumption in the 12 months to the end of June 2013.

Carlaw went on to add that: “the Scottish Government, while doing everything that it can to reduce the prevalence of smoking among all groups in society, should take cognisance of this report and the parallel warnings from Scottish retailers instead of insisting that the evidence coming from Australia is unequivocal.”
The motion failed.10
In reply, both Scottish Liberal and Scottish Labour MSPs submitted amendments to the motion, one noting:

that this report was paid for by several tobacco companies and produced at their behest … and understands that previous moves to regulate tobacco sales have been met by tobacco industry-funded reports predicting dire consequences that did not, in the end, come to pass.11

Scaremongering Scotland’s First Minister

Plain Packaging “Will Only Lead to a Rise in the Illicit Trade”

In December 2013, Philip Morris wrote to Alex Salmond, the First Minister of Scotland, with the results of a “revealing study” undertaken by Will O’Reilly who, according to the tobacco company had “uncovered an endemic illicit tobacco trade operating in Scotland”.
The letter enclosed some fifteen local and national press articles generated by Will O’Reilly’s investigations into tobacco smuggling across the country. Some had sensationalist headlines such as “Terrorist cigs link”12 and “City is illegal cig capital of Britain”13 whereas others did not mention that O’Reilly was working for PMI.14
Using the classic third party technique of using someone else to back up your argument, in the letter to Alex Salmond, Philip Morris quoted O’Reilly saying his advice to the Scottish government was not to implement plain packaging “as it will only lead to a rise in the illicit trade at the expense of Scottish tax payers and retailers”.
Philip Morris also used well-rehearsed language, by warning that: “As made clear by Mr O’Reilly, there are profound unintended consequences arising from the Scottish Government’s legislation”.
Salmond was then referred to Philip Morris’s public relations company Halogen Communications for further information on tobacco smuggling15

Philip Morris Warns Again About Illicit “Endemic”

In March 2014, Philip Morris lobbied Scotland’s First Minister again on the issue of illicit cigarettes, once again using more research undertaken by Will O’Reilly.
The letter said: “I am writing to inform you of the latest findings from the nationwide research led by former Scotland Yard Detective Chief Inspector Will O’Reilly which has uncovered an endemic illicit tobacco trade operating in Scotland”.
This time the letter included nineteen press cuttings from the national and local press featuring O’Reilly. Some 30 per cent of the articles failed to mention that the ex-Policeman was being paid by PMI.1617 18 19 20 21

PMI’s media activity timeline plan, PMI Corporate Affairs Update, February 2012 (slide 36)

The fact that Philip Morris sent the O’Reilly press stories twice to Alex Salmond fits into the growing evidence that the ex-Policeman’s research was part of the tobacco company’s public relations and media campaign to prevent plain packaging, and not a serious attempt to tackle tobacco smuggling.
Documents leaked in 2013 revealed that as part of its strategy to “ensure that plain packaging was not adopted in the UK”, the company intended to promote the argument that illicit trade was a growing problem in the UK.
Indeed, in June 2014, Philip Morris and O’Reilly were accused by ASH Scotland of exaggerating the scale of the illicit problem in Scotland in an article for the Sunday Times in Scotland. 22
Far from there being an “endemic” of illicit, the newspaper article pointed out that documents released under Freedom Of Information legislation revealed that O’Reilly had asked councils where to buy illicit tobacco products. The documents show that in October 2013, O’Reilly twice emailed a trading standards officer working for Renfrewshire Council asking for assistance.
In one email to the officer he wrote: “Any help you can give us as to likely areas or locations would be appreciated”.23 A week later he again asked for help: “I appreciate it is a busy time for you but any pointers for the guys would be very useful”. 24
The Sunday Times also reported that “Correspondence released by South Ayrshire council suggests that counterfeit tobacco sales were said to be concentrated at one market. O’Reilly was quoted in a local newspaper as warning that the illicit tobacco trade was booming.” 25
For more on Philip Morris’ secret lobby campaigns to derail Plain Packaging proposals:

Also see Industry Arguments Against Plain Packaging for more information.

Japan Tobacco International Enters the Scottish Illicit Debate

JTI Runs Illicit Adverts

JTI Advert

PMI is not the only tobacco company pushing the illicit argument in Scotland. In January 2014, Japan Tobacco International (JTI) sponsored adverts which appeared in the Edinburgh Evening News and Scotland on Sunday (see image).

JTI Calls for a Delay

On 14 March 2014, JTI also wrote to Scotland’s First Minister, Alex Salmond, calling on the Scottish Government to delay any decision on plain packaging. “This Government should not be acting now”, said the letter, arguing that the Point of Sale Display Ban was yet to be implemented, so too was the EU Tobacco Products Directive Revision.
Like PMI’s Anti-PP Media Campaign, the letter tried to exploit the on-going legal challenges to the plain packaging legislation in Australia. “There also remain a number of unresolved legal challenges to the Australian implementation”, the tobacco company warned before adding that the fact that plain packaging “is being actively considered at this stage, before the Australian Government has even begun to analyse the effect of the policy introduced there in 2012, seriously calls into question the Government’s approach”.
The company reiterated the industry line that: “ it does not make sense for the Government to introduce such controversial legislation without carrying out a wider review of the potential consequences, without evidence to support its public health benefits.” 26

Other Industry-Linked Groups Promote the Illicit Story

The Scottish Wholesale Association (SWA), whose members include British American Tobacco, Imperial Tobacco and JTI, also joined the debate, urging “the Scottish Government to look closely at the findings of a newly published report from Australia which shows that the market in illicit tobacco in the country has risen significantly since the introduction of plain packaging in December 2012.”27
The SWA had launched a “Plain Nonsense” campaign back in May 2012, urging Scottish retailers “to register their opposition to plans to standardise the packaging of tobacco products via a postcard, App and online at Plain Nonsense.”
Repeating many of the standard tobacco industry arguments against plain packaging, the SWA stated that there was “no credible evidence that plain packaging will have an impact on smoking rates,” and that “Plain packaging would be a boost to smugglers and counterfeiters, taking business away from legitimate shops.” It would also leave “Confused Retailers” and “Confused Customers.”28

The Scottish Grocers’ Federation (SGF) also called on the Scottish Government to “reflect on the findings” of the KPMG study. The 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.29

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”.30
Once again, many of these repeated long-used tobacco industry arguments and language, such as on illicit. For example, John Drummond, called plain packing a “smugglers charter”. 31
In its consultation response, the SGF admitted that just under 10 per cent of the financial contributions from its membership were from Imperial Tobacco, British American Tobacco and PMI.32

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  1. The Scotsman, Tobacco smuggling ‘puts corner shops under threat’, 8 August 2013, accessed February 2014
  2. S. Duffy, Evidence is just a smoke screen, Letter to the Scotsman, 9 August 2013, accessed February 2014
  3. A. McManus, Tobacco legislation could put 3000 jobs at risk, Sunday Herald, 18 August 2013, accessed February 2014
  4. ASH Scotland, “The Tobacco Industry Campaign on Plain Packs Cannot be Trusted”, Briefing Paper, undated
  5. KPMG, Illicit Tobacco in Australia, October 2013, accessed February 2014
  6. P.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
  7. A. Schweitzer-Thompson, “Subject: Evidence of illicit cigarette trade in Australia should give Scottish Government pause for thought,” Halogen Communications, 4 November 2013, accessed February 2014
  8. E. Dardis, Scottish Government Plans for Standardised Packaging of Tobacco Products, 13 November 2013
  9. Philip Morris, Scottish Government Plans for Standardised Packaging of Tobacco Products, 13 November 2013
  10. Scottish Parliament, Motion S4M-08283: Jackson Carlaw, West Scotland, Scottish Conservative and Unionist Party, KPMG Illicit Tobacco in Australia Report, 14 November 2013, accessed February 2014
  11. Scottish Parliament,Motion S4M-08283.2: Neil Findlay, Lothian, Scottish Labour, KPMG Illicit Tobacco in Australia Report, 14 November 2013, accessed February 2014
  12. E. Cairns, “Terrorist Cigs Link”, Daily Star, 2 December 2013
  13. C. Stewart, “City is Illegal Cig Capital of Britain”, Evening Times, 27 November 2013
  14. Journal and Gazette, “Illegal Cigs Smoked out in Bo’ness”, 22 November 2012
  15. Philip Morris Limited, “The Illicit Tobacco Trade in Scotland”, Letter to Alex Salmond, 12 December 2013
  16. P. Thornton, “Smoke ‘Em Out”, The Sun (Scottish Edition), 5 January 2014, p25
  17. M. Geissler, “Time to Stub Out Ciggies”, The Sun (Scottish Edition), 6 January 2014
  18. R. Mellon, “Boom in Bootleg Baccy”, East Fife Mail, 22 January 2014
  19. Wishaw Press, “Illegal Baccy Deals Rife Here”, 19 February 2014
  20. T. Pauling, “Trade in Illicit Tobacco ‘Rife’, Press and Journal, 22 January 2014
  21. Philip Morris Limited, The Illicit Tobacco Trade in Scotland – Update, 17 March 2014
  22. M. Macaskill, Row flares up over tobacco packaging, Sunday Times in Scotland,15 June 2014
  23. W. O’Reilly, Email to Trading Standards Officer, Renfrewshire Council, 23 October 2013
  24. W. O’Reilly, Email to Trading Standards Officer, Renfrewshire Council, 28 October 2013
  25. Mark Macaskill, Row flares up over tobacco packaging, Sunday Times in Scotland,15 June 2014
  26. JTI, Letter to Alex Salmond, 14 March 2014
  27. Scottish Wholesale Association, Wholesalers urge SG to exert caution as Australian report reveals plain packaging increases illicit trade of tobacco, 8 November 2013, accessed February 2014
  28. Scottish Wholesale Association, SWA launches robust campaign against plain packaging, 2 May 2012, accessed February 2014
  29. Scottish Grocers’ Federation, Plain Packaging Adds to Rise in Illicit Trade, 7 November 2013, accessed June 2014
  30. Scottish Grocer’s Federation, Standardised packaging of tobacco products, Undated, accessed February 2014
  31. Scottish Grocers’ Federation, UK Consultation on Tobacco Plain Packaging, 13 April 2012, accessed February 2014
  32. SWA and SGF “Join Forces” on Illicit Trade

    In January 2014, the SWA and SGF “joined forces” with the Scottish Anti-Illicit Trade Group (SAITG) to “highlight the escalating economic and community costs of the illicit trade in counterfeit goods” at a reception at the Scottish Parliament.33 SWA, SWA and SGF shine spotlight on economic and community costs of illicit trade, 17 January 2014, accessed June 2014