Has plain packaging worked in Australia?

Christopher Snowdon blogs:

As reported last week by Guido and Catallaxy Files (but no mainstream media outlets that I know of), tobacco sales increased by 0.5 per cent in the first year of plain packaging in Australia. I didn’t want to comment until I’d had a change to look at the newly published stats in depth, but I have now done so and the figures in Guido’s report are spot on.

21,901,393,720 cigarettes were sold in the twelve months before plain packaging was introduced. In the next twelve months, 22,016,130,420 cigarettes were sold. This is a rise – a small rise but a remarkable one considering that sales had been consistently falling for many years before the policy was introduced.

And this is on sales, not just manufacture.

As Sinclair Davidson has explained, advocates of plain packaging have done two things wrong in order to claim that there was a 3.4 per cent decline in tobacco sales in the first year of plain packaging. Firstly, they compared the calendar years 2012 and 2013 despite plain packaging starting at the beginning of December 2012. Obviously, they should be comparing December 2011-November 2012 to December 2012-2013. If they did that they would see that the difference is just 0.8 per cent.

So on the raw figures, the decrease was 0.8% – less than most previous years.

The second thing the campaigners willfully ignored was the tax refunded on tobacco products which were never sold to the public. This is a significant number of cigarettes when you consider that lots of branded tobacco products had to be taken off the market when plain packaging was introduced and were later destroyed. According to newly released data from the Australian government, it amounted to 284 million sticks. When these cigarettes are subtracted from the pre-plain packaging period, it becomes apparent that sales-to-consumers rose by 0.5 per cent in the first twelve months of plain packaging.

Here’s the calculation:

In the twelve months before plain packaging was introduced (Dec 2011-Nov 2012), the figures were as follows:

Manufactured cigarettes: 19,738,170,960

Cigarettes from rolling tobacco: 2,447,248,750

Never sold to the public: -284,025,990

Total: 21,901,393,720 

In the twelve months after plain packaging was introduced (Dec 2012-Nov 2013), the figures were as follows:

Manufactured cigarettes: 19,433,987,920

Cigarettes from rolling tobacco: 2,582,142,500

Total: 22,016,130,420  

Sales increase in the first year of plain packaging = 0.524%

I’d be interested in the data for the following 12 months also. The challenge is how to work out the impact of one policy (plain packaging) when other policies (excise tax increases) are also occurring.

This is why I think New Zealand should do a regionally based trial. Then after three years one could compare the change in smoking rates in the region/ with plain packaging with the regions without.