Australia: Economists refute tobacco companies' argument against plain packaging

Studying the impact of past policy measures on tobacco advertising, a group of economists from La Trobe University refute tobacco companies claim that the new plain packaging law amounts to acquisition of their property. "The claim from the tobacco industry that plain packaging will potentially reduce cigarette prices, is likely to be correct," said Professor Harry Clarke from La Trobe University's School of Economics. "But this price decline can be readily offset by increases in the tobacco excise...Comparing results from the advertising restrictions in the early 1990s, it is highly unlikely, however, that new low price brands from major companies will be introduced after this legislation." The group's research also refuted the claim that there would be a substantial increase in counterfeit cigarettes. "What is more likely is that the introduction of plain packaging will make cigarette production far cheaper, therefore making the illegal market less profitable, and less cost effective," said Professor Clarke. Health Canal. 

Date Posted: 1 May 2012