The plain truth on plain packaging

The ASI has long been sceptical about claims that plain packaging for cigarettes can cut smoking prevalence and with good reason. Back in 2012 we criticised plain packaging proposals for the UK: partly on the basis that there was no solid evidence of its efficacy. Initial evidence from Australia’s plain packaging law suggested it had no significant impact on smoking rates or quit attempts. 

A new paper published in Nature last week, using data from a longer time frame, has also found that plain packaging in Australia “did not significantly affect smoking prevalence”: using New Zealand as a control country. To those of us familiar with the economic literature on advertising and branding, this should come as no surprise. Different fonts and colours on cigarette packets don’t brainwash non-smokers into taking up the habit—they persuade existing smokers to switch to different tobacco brands. 

When you remove branding as a differentiating factor via plain packaging laws, you’d expect existing smokers to use alternative criteria to decide what cigarettes they smoke. The most obvious and important one is price, and this is exactly what the authors of this Nature paper found. 

“In response to the policy, smokers switched from more expensive to cheaper cigarettes and reduced their overall tobacco expenditure and expenditure intensity. However, as smoking became less costly, smokers consumed more cigarettes.”

So not only did plain packaging fail to make a dent in Australia’s smoking rate—it actually caused smokers to smoke more cigarettes as they switched to cheaper brands. Hardly a win for public health.

It would be great if the paternalists pushing for plain packaging on ‘junk food’ (which we also predicted would happen back in 2012) learned some of the lessons from Australia’s failed experiment. It’s likely to create the same substitution effect towards cheaper brands and may end up boosting overall consumption as it appears to have done for cigarettes. I’m not holding my breath.