Tobacco pack’s future is plain for all to see

[OZCUBAN]

Hi all just thought I would forward on some info I got during the week from an industry blog ( incase you don't know I am a printer ) just thought it might be of interest to some here

Tobacco pack’s future is plain for all to see – Print21 magazine feature

Thursday, 03 November 2011

The Federal Government’s Tobacco Plain Packaging Bill looks set to change the way tobacco products are branded and packaged in this country, leading to the introduction of generic packaging for hundreds of different cigarette brands. While major packaging printers claim to support the objectives of the Bill in reducing the impact of smoking on public health, the forced removal of all branding on a retail product signals a water­shed moment for the local industry. Cameron Boggs assesses the impact.

The Federal Government’s Tobacco Plain Packaging Bill 2011 (and the associated Bill regarding trade marks) passed the House of Representatives in August and, at the time of writing, was due to go before the Senate with the expectation that it will be passed and become law before the end of the year.

The stated aim of the legislation, according to the preamble, is to introduce generic, plain packaging for tobacco products in order to ‘reduce the attractiveness and appeal of tobacco products to consumers’. In addition, it is designed to ‘increase the noticeability and effectiveness of mandated health warnings’ and ‘reduce the ability of the tobacco product and its packaging to mislead consumers about the harms of smoking’.

These aims will be achieved by introducing a comprehensive ban on all branding and product embellishment on tobacco packaging. The Bill decrees that all retail packs of tobacco must be a standard drab brown colour without embellishment. This require­ment is backed up with legal ramifications for any packaging non-compliance including penalties of up to $220,000 for an individual or $1.1 million for a company. These are similar to the penalties that apply currently for any breach of the requirement for graphic health warnings on cigarette packages and cartons.

The timetable for the implementation of the legislation currently states that manufacturers and packagers must comply with the requirements by mid-May next year with all sales of branded tobacco products prohibited after July 1, 2012.

When the smoke clears, tobacco brands will be differentiated only by their variant name set in a standard colour, specific location, font size and style. With the exception of large graphic health warnings and any other relevant legislative requirements, all packs will look the same.

A plain precedent

Concerned with the possible precedent being set by the plain packaging legislation, Gavin Williams, CEO of the Packaging Council of Australia, can see the potential dangers if this action continues to other areas of the packaging supply chain. He has written to the Minister for Health and Ageing, Nicola Roxon, on the matter. While not wanting to comment specifically on the tobacco issue, Williams said the PCA’s concern was about the possible precedent that the legislation may set for other packaged products.

“In many respects, packaging is the identification for the brand. It’s what sells the product on the shelf, and if this were to become a precedent that extends to other areas it will be a major issue for the packaging industry. It could have damaging effects on company brands, trademarks and intellectual property.

“Clearly anything that restricts the ability of companies to market their product through packaging also undermines industry innovation. It certainly minimises product impact, yet it is the wider effects this legislation might lead to which are of major concern,” he says.

Australia’s packaging industry annually turns over around $9 billion and directly employs over 10,000 people. If the move to plain packaging progresses, there will be a huge cost involved and the possibility of far-reaching impacts.

“There will be major ramifications if it were extended beyond tobacco,” says Williams (pictured). “How would company A distinguish its products from company B? There are no plans to expand this to other areas, but if it were extended to other products, packaging companies would have to comply.”

Williams maintains that packaging is synonymous with a company’s image and marketing efforts in the wider society. It contains significant identifi­cation with the brand, trademarks and intellectual property.

“The degree to which the tobacco issue could be widened to other areas will undermine the extent of innovation, as it encourages others to push for plain packaging. It would also discourage other features that are now an integral part of packaging, such as tamper­proof and anti-counterfeiting devices,” he adds.

The International Chamber of Commerce (ICC) and its Business Action to Stop Counterfeiting and Piracy (BASCAP) initiative have urged the Government to consider the broader context this proposed legislation will have on IP protection policies, laws and enforcement regimes. They claim that plain packaging violates international free trade norms and standards.

Boost to illegal baccy

The effect of the legislation will obviously have a big impact on the local packaging industry. Tobacco packaging in Australia is dominated by the big two players, Amcor and Anzpac, both of whom were unavailable to comment for this article. However, in its submission to the House of Representatives Standing Committee on Health and Ageing inquiry into the draft legislation, Amcor drew attention to the possible consequences of generic packaging on the market for illicit and counterfeit tobacco products.

The argument goes that if the local tobacco market shifts from a large selection of brands with distinct product embellishments to a single generic standard, it will be easier for counterfeiters to pass off unregulated tobacco to unsuspecting smokers. Retailers and authorities will have trouble distinguishing legal tobacco from its illegal counterparts.

Tobacco companies fear that the Bill will open the floodgates for an illicit trade in cigarettes as simple, standard packaging will be easier to replicate using offset litho print, the most common type of process used for counterfeiting cigarette packets.

The size of this illegal market in tobacco is open to dispute with the tobacco companies claiming that it currently stands at about 16 per cent of the total tobacco trade. In contrast, health professionals, using data drawn from the Government’s own drug surveys, suggest it is less than 5 per cent.

Nevertheless, in response to industry concerns, the legislation will allow the continued usage of covert markings and a security measure of unique alphanumeric code markings on either the bottom or the side of the pack. Such elements are allowed as anti-counterfeiting measures with plain packaging as long as they do not interfere with the health warnings or link to marketing material.

It’s not over yet

Big Tobacco has already signalled its intention to fight the legislation in the courts over the violation of trademarks and acquisition of property—a threat which Nicola Roxon has dismissed as “huff and puff”—so it seems likely that the saga of the plain pack will continue to be played out for a while yet.

In its submission to the inquiry, one of the major tobacco companies, British American Tobacco Australia (BATA), also argued that the timetable for the implementation of plain packaging is unrealistic.

Currently the legislation is due to come into effect on January 1, 2012, giving cigarette manufacturers and packaging companies just three months to switch their production lines over to the new design.

In contrast, BATA claims that even if changes involved only the printing on the outside of a cigarette pack with no changes to its construction then it would still take 12 months to implement. Any changes to a pack that might involve investing in new machinery would take a lot longer, up to 18 months to install and commission. In addition, BATA claims that the requirement to provide an undecorated liner would require the development of new machinery capable of handling a non-embossed material and that this could take up to two and half years to implement.

According to industry sources, difficult times lie ahead for local tobacco packagers if the generic standard becomes the rule. Packaging companies will still have to produce branded packaging in tandem with the plain packaging leading up to the roll over. In addition to producing plain packaging for the local market, print lines for companies catering to Asian and international markets will still have to be employed, making the manufacturing process more complex and costly.

Whatever the outcome and final effect of the plain packaging legislation, one thing is clear; it signals the end of a tradition of packaging that has produced some of the most innovative uses of print and embellishment seen on the market. From a print perspective, the future will definitely be a bit more drab.

What is a plain package?

Requirements for plain retail packaging of Australian tobacco products will restrict the manufacturing process to a single ‘drab dark brown’ ink in association with the four-colour process used in the graphic anti-smoking imagery.

Both sides of the matt finished packaging must not have any decorative ridges, embossing, bulges or any embellishments other than what is permitted by the regulations. Any glue or adhesives used in the manufacturing process must be clear and uncoloured. If the pack contains a lining, it must be made only of foil backed with paper.

All cigarette packs and cartons must be made of ridged cardboard to form rectangular surfaces on all sides, meeting at firm 90-degree angles. Appearance of the retail packaging must not change after sale, prohibiting the use of heat-activated inks, removable tabs and foldout panels amongst others.

Pictured, one of the proposed new health warnings to be included on the plain cigarette package when it is introduced; the warning and graphic will cover 75 per cent of the front of the cigarette pack rather than the current 30 per cent.

“Plain packaging and graphic health warnings mean that the glamour has gone,” said the Minister for Health and Ageing, Nicola Roxon.

And so has the freedom of choice ?

OZ

 

[NJP]

The glamour was gone the moment that Nicola Roxon showed up. Free range practical shoe wearing party pooper.

[Skitalets]

What a mess! Is there any hope that the courts in Oz will overturn this? Do you (or more accurately your corporations, I suppose) not have free speech rights that allow you to package things as you wish?

[Fuzz]

What a mess! Is there any hope that the courts in Oz will overturn this? Do you (or more accurately your corporations, I suppose) not have free speech rights that allow you to package things as you wish?

In Australia our Constitution does not include a Bill of Rights like in the US. However, it does protect certain freedoms, from memory we have 4 express rights; right to trial by jury, right to just compensation, right against discrimination of out of state residence (this one means that we can't treat other state's resident worse off than our residents, e.g. fining a Melbournite $1000 and a Sydneysider $500 for the same offence), freedom of religious expression, and one implied right; freedom of political communication.

The only thing I can see potentially stopping plain packaging is that it is a trade mark infringement. Then again, our Trade Practices Act is so ineffectual it renders the point moot.

EDIT: I just realised that the right to just compensation could be used counter plain packaging as the govt would be forced to compensate tobacco companies for removing their trademarks.

[mazolaman]

this will inevitably spread across the world.The UK regularly moots it.

It's a tough one for me,as I agree with the concept of personal freedom,but am heartbroken when seeing 10 year olds in London smoking fags and drinking strong cider.

Also,it is a stretch to protect the tobacco companies,who are some of the most evil companies on the planet,little better than drug pushers.

The problem for me is that cigar smokers and companies are being lumped in with this.Nobody smokes cigars to look cool,no 10 year old tries to buy a 5 pack of magnum 50's from his local newsagent

I also hope they will be altering the packaging to high fat high salt foods across the world,as obesity is a huge killer,probably not though...

[El Presidente]

this will inevitably spread across the world.The UK regularly moots it.

It's a tough one for me,as I agree with the concept of personal freedom,but am heartbroken when seeing 10 year olds in London smoking fags and drinking strong cider.

Also,it is a stretch to protect the tobacco companies,who are some of the most evil companies on the planet,little better than drug pushers.

The problem for me is that cigar smokers and companies are being lumped in with this.Nobody smokes cigars to look cool,no 10 year old tries to buy a 5 pack of magnum 50's from his local newsagent

I also hope they will be altering the packaging to high fat high salt foods across the world,as obesity is a huge killer,probably not though...

Within 5 years it will be the norm. Every Government Health Lobby group wants to be the" toughest". The US will be the last to fold but it is inevitable. There are more votes in the"Health Lobby: than the "Freedoms" Lobby. The Health Lobby is better organized with better access to Government.

It will all go underground. Hoist the Jolly Roger