Submission to Joint Oireachtas Committee on Standardised Packaging by Convenience Stores

Submission to Joint Oireachtas Committee on Standardised Packaging by Convenience Stores & Newsagents Association CSNA , Thursday 6th February 2014

The CSNA welcomes the opportunity accorded to it to present our views to the Committee with regard to the Heads of Bill.

The WHO has published advice to Governments that they should enlist the support of civil society organisations, and specifically retail organisations when seeking to enact and enforce bans on Tobacco Advertising, Promotion and Sponsorship activities.

We make reference to this advice as it is our opinion that the authors of Tobacco Free Ireland, the Tobacco Policy Review Group elected not to consult any representatives of the 13,000 registered tobacco retailers during their deliberations. There is a reference within the report to consultation with stakeholders and CSNA would like to place on record that this consultation was incomplete and contrary to the advice of the WorldHealth Organisation.

As the Review Group made a number of recommendations for legislative change, we believe that, in line with Cabinet Guidelines, and RIA (Regulatory Impact Assessment) should have been conducted by the Policy Review Group and provided alongside the Report which was adopted as Government Policy one month after its publication.

Neither the Committee nor any of the interested parties invited to make submissions on this Bill have had the benefit of an RIA to accompany the Heads of Bill, we consider this to be a significant deficiency in the consultative process.

This Bill, in style and purpose, owes much to the Australian Bill. We need to remind the Committee that a very comprehensive suite of measures were introduced alongside their Bill to provide for the desired outcome, increases in the already very significant reduction in smoking initiation and prevalence of their citizens.

These measures included;

• An annual increase over each of the following 4 years of a 25% increase in excises
• The reduction of Duty Free Allowances from 250 cigarettes to 50 cigarettes
• Pictorial warnings, in existence since 2006 were revised and enlarged
• Aus $85million for social media messaging
• Aus $28million of this for high risk and disadvantage groups
• 100,000 scripts for nicotine patches
• Exemption from Sales Tax for NRT in non-pharmacy outlets
• Additional subsidies for lower strength NRT
• New penalties specifically for Tobacco smugglers
• Legislation enacted to restrict internet advertising of tobacco products.

We remind the Committee that smuggling to tobacco products in Australia was 4% in 2011

The Australian Government has committed to review the first 12 months since the introduction of these measures. The Head of the Preventative Health Taskforce, Professor Daube has been quoted on saying ‘I don’t think anybody reputable would make claims about adult prevalence until we have the next National Government run survey (ABC’ 7 News Jan 22nd 2014).

The CSNA requested sales information from our counterparts in Australia. This data (provided by retailers, not tobacco industry sources) showed that in the first 6 months of 2013, when compared with 2012, overall tobacco sales volumes had increased in the stores surveyed by 4.5% in units from 9.616million units sold to 10.047million units, and from Aus $124.3million to Aus $134.6million, an increase of 8.2%.

The worrying aspect of these figures, for Exchequer and retailers, was that there was a dramatic increase in the Value and sub Value categories which increased by 57% collectively in terms of volume, and a very significant additional 22% of sales in the Roll Your Own category. This coincided with decreases in the Premium and Mainstream ranges which decreased by 9.1%. Cigars both wet and dry declined by 90% and 32% in quantity.

Were these ‘down trading’ figures to be replicated in Ireland following the introduction of Plain Packaging, the effect would be significantly disadvantageous for our members but would have little or no measureable financial impact upon the multinational tobacco companies from whom we source our tobacco products.

This is due to the unique positions that the State has provided to these companies, courtesy of the Finance Act.

It is an offence for retailers to sell cigarettes above the Recommended Retail Price, this price is determined by the companies. Regardless of whether we purchase from the companies or are supplied by distributors or cash and carry’s (at higher wholesale prices) we must sell at RRP. The companies have subsidised and manipulated this RRP within the Value sector, have stimulated demand through a variety of activities, including ‘holding’ the RRP subsequent to Budget increase and are perfectly positioned to meet the expected additional demand for the Value sector range if plain packaging is implemented.

Retailers will find the wholesale prices will increase for this range yet, due to the unique situation that theGovernment have provided to these companies, they will by able to fix the RRP at existing levels.

We ask the Committee to consider a number of other matters that we have indentified as weaknesses in achieving the dual purposes of reducing harm to children and preventing the continuation of the deception of existing smokers.

• There is an urgent need, not provided for in the Tobacco Free Ireland report, to outlaw proxy purchasing, i.e.the purchase of tobacco by an adult on behalf on minors. This is part of French Criminal Codes.
• We believe that society can register their disapproval of smoking by minors by mirroring our own laws on the attempted purchase and possession in a public place of alcohol and introduce similar prohibitions for tobacco products.
• If the Committee accepts the proposition that the usage by tobacco companies of various colours on their packaging is a subliminal attempt to deceive consumers into believing that one colour is ‘lighter’ or ‘safer’, then it is illogical to continue to permit these colours to be continued to be referred to on each occasion that the consumer requests such a product using that exact colour as the description for their purchase.
• We are also most concerned that there is no attempt by this Bill to dilute the effect that ‘Duty Paid in another jurisdiction’ products will have upon the public health policy of the State. Figures provided by the Revenue have indicated that 330million cigarettes and an unrecorded amount of RYO were imported ‘legitimately’ last year into the State. The presence of this very significant number of branded packs are in sharp contrast to the determination of the Australian Government to give their Bill the maximum level of effectiveness. CSNA urges the Committee to recommend to the Government that is takes appropriate action to reduce the Personal Allowance for Travellers entering the country, similar to the actions taken by Finland to defend their Public Health Policies.
• We would remind the Committee that the new EUTPD has increased the size of PHW to 65%; this is the same figure that is stipulated in this Bill. The TPD also provides for the elimination of the ‘lipstick’ packet that the Minister was justifiably outraged by.
• We believe that the Committee should recommend to the Department that they should consider increasing, over a 3 year period, the increase of the minimum age that young persons may legally purchase tobacco products from the existing 18 years to 21 years. This would extend protection against initiation into a cycle of sickness and ill health for those children currently aged 17 and under.

We have outline our objections and request for clarification on a number of aspects of this Bill

• We need to have a clarification of ‘tobacco products’ as the definition provided in this Bill is at odds with the PHTA 2002 Act.
• We cannot accept that retailers should be penalised on the double in being fined and taken off the register for and unspecified period
• Any implementation of this Bill should ensure full consultation with retailer groupings as well as Revenue to coordinate crediting etc.
• The absence of an offence for purchasing branded product by an individual, provided for in this Bill, is tantamount to facilitating receiving stolen goods.
• Retailers need to be permitted to engage in collective bargaining through their trade associations with suppliers. This would introduce a balance into what is now an uneven and unequal relationship. This is not only permitted but encouraged by the Australian Competition Authority
• Retailers need to be provided with assistance to prepare the ground for a Tobacco-Free society
• CSNA must request that this Bill be deferred until all of the above measures are put in place to protect children, the State, consumers and retailers.