MONTREAL, May 31, 2016 – The public consultations on plain packaging announced by Health Minister Jane Philpott should focus on the factual evidence regarding the effectiveness of such a regulation on smoking rates. So far, the numerous studies of its effectiveness are inconclusive.
Plain packaging consists of covering a pack of cigarettes with a health warning (which now occupies 75% of the surface of packages in Canada), excluding any distinctive brand colours, as well as any logo or other design elements associated with the brand. The measure is controversial to say the least, since is goes far beyond any regulations authorized to date for a legal product.
Supporters often cite the example of Australia, the first country to adopt such a measure in late 2012. Yet three years later, the data on tobacco consumption are hardly conclusive. "The only thing that can be said is that the debate over the effectiveness of plain packaging has not been settled. It would be hazardous to rely on the Australian experience in order to implement such a policy here," says Youri Chassin, Research Director at the MEI and author of a forthcoming Research Paper on the topic.
The Australian government argues that plain packaging, combined with other measures, is responsible for a drop of half a percentage point in smoking prevalence three years after the adoption of this measure. On the other hand, the data show that no statistically significant drop in the proportion of smokers had occurred in any of the five Australian states one year after the implementation of plain packaging. This proportion even increased in four of the five states. Other data indicate an increase in contraband tobacco.
Also, economically and legally, plain packaging attacks the basic rights of companies and their shareholders, such as intellectual property, by removing all control over the appearance of their products. It can therefore be seen as abusive expropriation potentially entailing requests for financial compensation.
"It sets a dangerous precedent authorizing the expropriation of a key asset without financial compensation for corporate citizens whose activities are legal, simply because they are not in the good graces of the government or of public opinion," says Youri Chassin.
"The burden of proof rests on the shoulders of plain packaging supporters, and a regulation of this magnitude should only be implemented in Canada if its effectiveness has been clearly demonstrated. In the meantime, the government should refrain from intervening and let Canadians decide for themselves," adds Jasmin Guénette, Vice President of the MEI.
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The Montreal Economic Institute is an independent, non-partisan, not-for-profit research and educational organization. Through its studies and its conferences, the MEI stimulates debate on public policies in Quebec and across Canada by proposing wealth-creating reforms based on market mechanisms.
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