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  1. 1


    The effect of Plain Packaging is not as clear as it is set out in this article. In fact, when I do my calculations, the effect is negligible.

    If you do some standard regression analysis on the ABS HFCE stats for tobacco; using seasonally adjusted % tobacco volume changes as your y variable and your x variables being the historic trend plus a couple of dummy variables, one representing the introduction of plain packaging, the other price increases due to excise/GST, you would discover that plain packaging did not cause statistically significant decreases in sales volumes at the 95% confidence level.

    However, the excise increase and price rises that occurred over the 2000’s due to the GST and government policies have been far more successful in reducing cigarette and tobacco consumption volumes (and is statistically significant at the 95% confidence level.)

    As economics says for most goods that are price elastic; when prices go up, demand goes down. Pretty simple.

    But hey, don’t let proper statistical analysis get in the way of a feel good measure.

  2. 2

    Chris Undar

    > the effect is negligible

    That will be important evidence in the Hong Kong case where Philip Morris is suing Australia over the introduction of plain packaging.

  3. 3


    [The effect of Plain Packaging is not as clear as it is set out in this article. In fact, when I do my calculations, the effect is negligible.]

    Whether or not your calculations are correct the cigarette companies clearly don’t think it is a negligible matter.

  4. 4


    The reason the companies don’t like it is it reduces their brand advantage, within the existing user population. It’s the battle between companies we are talking about, not the over all sales of products across the industry as a whole.

    i.e why does an existing smoker make the distinction between Longbeach vs Winfield. A lot of that decision comes down to brands and packaging (which is why the companies are annoyed)

    When packaging is removed, and cigarettes become a commodity rather than a good, their brand advantage (which they spend millions on) is removed so they could lose market share and any above average margins they might have been able to obtain.

    The only people who benefit are the newer/cheaper cigarette manufacturers who get an instant competitive benefit.

  5. 5

    Chris Hartwell

    Ah, so it break oligopolies – very worthwhile a policy then. Let quality determine their marketshare.

  6. 6


    In my opinion it is a disgrace that they regulated for removal of tar, nicotine, CO levels. Nowhere else, not food, not alcohol, not pharmaceuticals, would this be allowed. It is an indication of the level of fanaticism of these public health practitioners, as are the numbers reported in Scott’s posts, by now well known, indicating that plain packaging had little or no effect.


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