Australia Caught Fudging The Truth While Trying to Defend Its Failed Plain Packaging Scheme

(Photo by Justin Sullivan/Getty Images)

Drew Johnson Contributor
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When my niece, Averie, was about 7 years old, my family tried to teach her how to play Monopoly.

As the game went on, she grew confused and frustrated. She didn’t have as many properties or as much money as the rest of us, and she couldn’t quite grasp the rules.

So she decided to make up her own.

She ransacked the bank, stole everyone else’s houses and hotels, moved other people’s game pieces where she though they should go and, at one point, tried to stuff the dice up her nose.

It’s one thing for a frustrated kid to make up some new rules when a game isn’t going her way. It’s quite another when a major nation does it.

Yet, that’s exactly what Australia did last month when it released a report attempting to claim victory for its foolish, freedom-crushing plain packaging regulations on tobacco products.

In 2012, Australia’s government began requiring tobacco products to be sold in drab greenish-brown packs, with no brand-specific logos, colors or symbols. At least 75 percent of the front, and 90 percent of the back, of cigarette packs in the Land Down Under must be covered with warning labels and graphic images of tobacco-related diseases or illnesses (such as a gangrenous foot or a sickly eyeball).

By stripping tobacco products of their brand identity, the Australians turned the laudable goal of reducing tobacco consumption into a shocking attack on the principles of intellectual property.

Since the plain packaging law prohibits brands from using their trademarks and kills brand identity, consumers lose the ability to easily identify trustworthy, higher quality and, potentially, less harmful products. The directive sets a dangerous precedent that may ultimately result in plain packaging regulations for alcohol, candy, soda, fast foods and anything else nanny-state lawmakers want to scare people away from consuming.

Plain packaging also appears to violate a number of trade agreements and World Trade Organization (WTO) protections on intellectual property rights and branding.

Not surprisingly, the plain packaging directive has landed the Australian government in international court, where a number of concerned countries are embroiled in a WTO dispute in an attempt to repeal the scheme and protect intellectual property rights.

But there’s another problem with plain packaging beyond trampling the brand identity that many companies have worked generations to cultivate: It doesn’t work. The law has failed to reduce tobacco use.

No evidence exists indicating that plain packaging led to a reduction in tobacco use. In fact, smoking rates in Australia actually increased after implementation plain packaging regulations.

That’s because smokers stopped buying cigarettes based on brand preference. Instead – since cigarettes all look the same – most folks just bought the cheapest cigarettes they could find. Cigarette companies, unable to compete on quality or customer loyalty, engaged in a price war. As a result, prices dropped and smokers could afford more cigarettes.

The number of adult smokers increased for the first time in a generation, and the proportion of teenage smokers increased by 36 percent in the year after plain packaging was introduced.

Australian lawmakers responded by levying one of the world’s steepest tobacco taxes, sending cigarette prices soaring to nearly $20 per pack. Naturally, smokers responded by buying fewer packs or quitting.

Of course, the Australian government would look absolutely foolish if it admitted that its plain packaging scheme was such a failure that it actually caused more people to smoke.

So what did Australian officials do? They took a page from my niece’s handbook. They changed the rules mid-game, hoping to beg, cheat, steal and lie their way into an illegitimate and undeserved victory.

In February, the Australian Department of Health came out with a long-anticipated report claiming tobacco consumption fell 3.4 percent following the implementation of plain packaging. But those numbers are completely bogus, and the health bureaucrats – who deserve an Oscar for keeping a straight face when the report was released – know it. In reality, plain packaging had nothing at all to do with decreased tobacco consumption. Smoking rates only dropped after the massive tax increase made cigarettes unaffordable for many Australians.

Further, the study was published eight full months after it was scheduled to be released – an indication of just how seriously the Australian government took the tall task of burying the truth by tinkering with numbers and fudging outcomes.

The country’s officials knew that if they were honest about the failure of the plain packaging fiasco, it would damage their case in international trade courts – destroying whatever feeble justification they have for steamrolling the intellectual property and trademark rights that serve as a foundation for commerce in the developed world.

The truth would also wreck other countries’ plans to implement plain packaging schemes, since all nations planning to implement plain packaging use Australia’s “success” as a rationalization for the stifling regulations.

Unfortunately for plain packaging advocates pushing to cover cigarette packs across the world in graphic images and warning labels, the truth has a funny way of sneaking out. Policymakers in the United States, Europe and Asia who were considering plain packaging as a method to reduce smoking are coming to realize that such regulations may only lead to increased tobacco consumption, as was the case in Australia.

We all want fewer people smoking. And there’s nothing wrong with taking reasonable steps to make tobacco use less appealing. But concocting a plan that assaults one of the cornerstones of free society, then trying to cover up that plan’s failure when it proves disastrous is simply not acceptable.

Australia’s health officials should be ashamed for releasing a bogus, dishonest report attempting to justify its plain packaging mistake.

Even my cheating little niece wouldn’t go that far to try to win.