Tuesday, January 27, 2015

Vote expected in U.K. on plain packaging for cigarettes

The latest government attempt at plain cigarette packaging in the United Kingdom is sparking a fierce response from two British tobacco manufacturers. However, industry analysts and marketing officials said Friday they doubt there will be a spillover effect in the United States despite a similar push by anti-tobacco groups.

According to several UK media reports, Parliament members are expected to vote on plain packaging by March 30. The initiative is based primarily on regulations enacted in Australia in 2012 that have produced mixed results to date. If the British proposal is enacted, it would go into effect in May 2016. It would ban brightly colored packs and require packs to be uniform in size, shape and design and to carry large picture health warnings.

British health minister Jane Ellison said plain packaging was a "proportionate and justified response" because of the health risks associated with smoking, according to The Guardian newspaper.

British American Tobacco Pic, owner of 42 percent of Reynolds American Inc., said the plain packaging proposal "is a serious error of judgment given the clear evidence from Australia that plain packaging has not achieved any of its public health objectives and has increased illicit trade to its highest level in seven years."

The main plain-packing arguments expressed by Australia government leaders are that the packaging would help reduce overall smoking rates, reduce youth smoking rates and increase the effectiveness of health warnings. According to media reports, youth smoking rates have risen in Australia since 2012 and overall smoking rates have been flat.

A similar plain packaging proposal has been pushed among U.S. anti-tobacco advocates and Food and Drug Administration officials since 2009. However, advocates' biggest goal - requiring graphic warning labels on the top half of packs - has been stuck in neutral for nearly two years. Two separate federal courts are split on whether graphic warning labels violate tobacco companies' free-speech rights under the First Amendment.

U.S. tobacco companies increasingly rely on cigarette packaging to build brand loyalty and grab consumers - one of the few advertising avenues left to them after the government curbed their presence in magazines, billboards and TV They argue the proposed warnings went beyond factual information into anti-smoking advocacy.

Imperial Tobacco Group Ltd. has agreed to spend $7.1 billion to buy all of Lorillard Inc.'s operations outside its Newport brand in a three-way deal involving Reynolds, the maker of Camel Black cigarettes. Imperial offered similar comments to BAT on the plain packaging proposal, saying "it is regrettable that this issue has been caught up in knee-jerk electioneering at the expense of evidence-based policy making."


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