National Drug Strategy
National Drug Strategy

British American Tobacco Australia - Response to the draft National Tobacco Strategy 2012-2018 - 25 June 2012

Eliminate remaining advertising, promotion and sponsorship of tobacco products;

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The following section outlines BATA’s position on the numerous actions proposed under the above priority area.

Plain Packaging

At the time of writing, BATA’s High Court challenge to the Federal Government’s plain packaging laws is yet to be determined.

BATA remains opposed to the introduction of plain packaging. Despite claims made in the draft NTS, we believe the policy is not supported by proof and that significant negative consequences may arise if our challenge is unsuccessful.

Following is a summary of BATA’s objections to plain packaging.

No real-world evidence that plain packaging will result in a reduction in smoking prevalence

There is no real world data to demonstrate that the plain packaging of tobacco products will be effective in discouraging youth initiation, encouraging cessation by existing
smokers, or increasing the salience of health warnings, a point acknowledged by former Health Minister Roxon herself.

The Government has relied on a number of studies, research and data to purportedly support its claims that plain packaging will achieve its desired purpose.

Concerns with Plain Packaging are shared globally by companies and business groups

There have been House of Representatives and Senate Inquiries into plain packaging, as well as a consultation process being undertaken in the United Kingdom on standardised tobacco packaging. The concern regarding such a policy is evidenced by the fact that a large number of independent third parties, ranging from manufacturers, business associations, retailers, wholesalers, experts and intellectual property organisations throughout the world lodged submissions expressing their serious concerns.

Plain Packaging could lead to an increase in Illegal Tobacco Trade

A range of commentators, including the Australian Government, recognise that plain packaging could lead to an increase in illicit trade.

Plain packaging could more easily facilitate counterfeiting and smuggling, and thus the distribution of products through unregulated, untaxed criminal networks which are more readily accessible to underage and vulnerable smokers, while at the same time making policing the illicit trade in tobacco significantly more difficult.

It would be far easier for counterfeiters to replicate a government mandated standard packet design than to copy the designs used on current tobacco packaging. Consumers will find it difficult to identify counterfeit products. This would also most likely result in a broader network of manufacturers of illegal tobacco and the sales of illegal tobacco to increase.

Larger Health Warnings

BATA notes that new and larger graphic health warnings have been legislated for and will become mandatory on 1 December 2012. Obviously, BATA will comply with the law. This does not mean however, that BATA accepts the need for these new and larger health warnings. Our reasons for this view are set out below.

Larger Health Warnings - Awareness

Awareness of the risks of smoking is universal: There is a substantial volume of literature establishing that awareness of the risks of smoking are already exceptionally high.
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For example, Tobacco In Australia Facts and Issues: A Comprehensive Online Resource reports that “95% of respondents believed that smoking caused illness or damage to health. Highest awareness was of lung damage (especially lung cancer) and arterial illness or damage.”17

Similarly, in “Research Regarding the Effects Of Package Design Including Plain Packaging - A Literature Review”, author Jonathan Klick, professor of law and economics at the University of Pennsylvania and the Erasmus Chair of Empirical Legal Studies at the Erasmus University in Rotterdam, notes that “even though 96 percent of respondents to a July 2008 Gallup poll in the U.S. indicated that they were aware that smoking is harmful, 21 percent of Americans still smoked in 2008.”18

This suggests that many individuals will choose to smoke even though they are fully aware of the health risks. Professor Klick also points out that a report issued by the Public Health Research Consortium commissioned by the UK Department of Health “Evaluating the Impact of Picture Health Warnings on Cigarette Packs” (2010) (PHRC Report) concluded that “the introduction of {graphic health warnings} in England in October 2008 has not had any discernable impact on the salience of health warnings, smoking prevalence or consumption.”19

On the issue of awareness the PHRC Report found that:
i. both pre and post the implementation of the picture health warnings in England in 2008, virtually all survey participants could name at least 1 health effect associated with smoking - 99% pre 1st October 2008 and 97% post 1st October 2008; and
ii. over 90% of young people agreed that smoking causes heart disease, mouth or throat cancer and gum/mouth disease. 100% of young people agreed that smoking causes lung cancer. (at page 51)

Professor W. Kip Viscusi, the John F. Cogan Jr. Professor Of Law And Economics and Director of the Program on Empirical Legal Studies at Harvard Law School, concluded that the awareness as to health risks from tobacco smoking is universal: “The available evidence demonstrates that people are aware that smoking is in fact quite risky for one’s health. Survey evidence with respect to risk beliefs for all available objective risk measures suggests that these risks are widely understood.”20

Professor Viscusi further notes that “the public is already fully aware that tobacco use can be hazardous to health. Because tobacco consumers already perceive significant risks associated with smoking, telling them what they already know will not affect their risks beliefs or behavior.”21 If anything, evidence presented in Viscusi suggests that Americans and Europeans over-estimate many of the risks of smoking22, and yet many of them continue to smoke.

Finally, a number of Courts have repeatedly held that the public has long known of the serious risks associated with smoking, including that smoking is addictive and causes serious diseases like lung cancer.

For example, the High Court of New Zealand has concluded that awareness of the health risks of smoking is universal. In Pou v. British American Tobacco (NZ) Ltd, the court held that “the risk that smoking could be injurious to health was a matter of common knowledge to those who were likely to purchase cigarettes in 1968.”23

Numerous courts throughout the EU have also repeatedly held that the public has long known of the serious risks associated with smoking, including that smoking is addictive and causes serious diseases like lung cancer.

For example, in Italy, over a dozen decisions have been rendered making express findings about the universality of the public’s awareness. One such court wrote the following:

“that cigarette smoking harms health and that it can cause cancer, must be deemed a concept commonly spread for many years, and such information was not obscured or affected by the representation of smoking that was given at times by mass media and society in general.[…]

“In light of the above considerations, it appears evident that, since in Italy the awareness that smoking is harmful and creates addiction spread in a variety of forms, changing over the time (in parallel with scientific research and awareness on the part of the institutions of the problem’s social impact), it is possible to state with certainty that ever since the 1930’s the risks that smoking involves and the difficulties of stopping smoking were already largely known to the entire Italian society and were diffused at every social level and throughout the
entire Italian territory. […]”
24 (emphasis added).

The Italian courts are not unique in this regard, with similar findings having been made by courts in Spain,25 Germany,26 Scotland27 and the Netherlands.28

In conclusion, there is all manner of data and information establishing that consumers are fully aware of the health risks associated with smoking and, indeed, overestimates them and hence will not gain any further information from “larger” or “further updated” health warnings.

Larger Health Warnings – Effectiveness

Research indicates that graphic health warnings have not had an impact on smoking prevalence, with some researches concluding that, the graphic health warnings “have not had a discernable impact on smoking prevalence.”29

The UK government reached the same conclusion in the PHRC Report which concluded that despite the visibility of the graphic warnings and evidence that the public had received the warnings, there was no fundamental change in risk beliefs or behaviour after the advent of graphic warnings in England. More specifically, the Report concluded “The range and depth of knowledge about the health risks of smoking did not change after the pictures were introduced.” Awareness of some conditions featured in the warnings, such as gum/mouth disease rose, but there was no net effect on behaviour. These results suggest that targeted warnings to address specifically defined information gaps can be effective. But the overall impact of the graphic warnings was limited:
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“There were very few smoking-related behaviour changes observed after the pictures were introduced.”

and the warnings had a “negligible” impact on young people.

“Among both adults and young people the impact of the picture health warnings as measured by a range of indices was modest. Post implementation of the pictures no increases were observed in the range or depth of awareness of the health risks associated with smoking or secondhand exposure to smoke, Cigarette smoking prevalence and cigarette consumption did not vary and there were no increases in behavioural responses such as attempting to stop smoking, forgoing a cigarette when about to smoke one or stubbing a cigarette out.”30

Industry Participation

It is concerning that the draft NTS appears to want to limit the ability of the legitimate tobacco industry to participate in the public debate surrounding issues relevant to our industry.

It is important in a democracy, and for effective, meaningful policy to be developed as part of that democratic process, that all views are heard in policy development.

When there was criticism of the Food Industry’s involvement in development of the obesity policies of the Preventative Health Taskforce, then Health Minister Nicola Roxon said, “…. I saw no reason for people to fear industry engagement – quite the opposite”. 31

Indeed the Office of Best Practice Regulation (OBPR) advocates consultation in the development of regulatory proposals, and the review of existing regulations, to ensure that both those affected by the regulation and the regulator have a good understanding of the issues under consideration. Such a process is important as it ensures that there is a clear understanding of all regulatory options to address a given problem, possible administrative and compliance mechanisms, and associated benefits, costs and risks.32

For this reason, good regulatory practice dictates that tobacco manufacturers and others within the tobacco industry should be included in the consultation process to develop effective tobacco regulation.

Freedom of speech

The Australian Constitution contains an implied guarantee of freedom of communication in relation to government or political matters. The freedom is not restricted to the choice for electors at federal elections. It extends to, for example, the discourse regarding the administration of federal and state governments at all levels and their policies.

The implied guarantee is confirmed in statutory instruments relevant to tobacco products, namely, the Tobacco Plain Packaging Act 2011 and the Tobacco Advertising Prohibition Act 1992. The latter act provides further insight into what might fall within the scope of
“government or political matters” –

“government or political matters relating to any level of government in Australia, and includes any of the following matters:
(a) participation in, association with and communications in relation to any election or appointment to public office; and
(b) political views or public conduct relating to activities that have become the subject of political debate; and
(c) the performance, conduct, capacity or fitness for office of a person elected or appointed to, or seeking election or appointment to, any public office; and
(d) the actions or policies, or proposed actions or policies, of any government in Australia or any Australian political party.”

FCTC Article 5.3

The draft NTS aims to “consider and develop policies and regulatory options consistent with Article 5.3 of the FCTC to prevent tobacco company interference in public health policies”33.

It is important to be clear about what government Parties to the FCTC are actually required to implement as an obligation under Article 5.3. Article 5.3 states:

“In setting and implementing their public health policies with respect to tobacco control, Parties shall act to protect these policies from commercial and other vested interests of the tobacco industry in accordance with national law.”

Importantly, this Article does not prevent governments from engaging with the tobacco industry, either through consultation processes on proposed regulatory measures or otherwise.

It is up to governments to decide how they want to implement this Article 5.3 obligation in accordance with their national laws - something that is actually recognised in the text of Article 5.3 itself.
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Whilst some may say that tobacco is a controversial product, it is a legal one.

Through our annually released Social Report, BAT reports openly about the work it does around the world; our efforts to engage decision makers; and our express views on issues that affect our business.

We will continue to transparently make our views known along with everyone else involved in the debate, which ever ‘side’ they’re on.

Having a commercial, or indeed any sort of interest, in a policy issue should not negate a legal company, selling a legal product, from participating in the debate. Industry engagement should not be feared, quite the opposite.

To follow such logic would be to exclude unions or business groups from involvement on industrial relations policies, airlines would be excluded from participation in aviation policies, motoring organisations excluded from automobile policy, and alcohol and food companies excluded from relevant policy debates.

FCTC Guidelines are not mandatory or legally binding on governments

The third session of the FCTC Conference of the Parties held in November 2008 adopted Guidelines for implementation of Article 5.3.

The Guidelines state that governments should “establish measures to limit interactions with the tobacco industry and ensure the transparency of those interactions that occur” with the Recommendations being:
Again, these are only recommendations to governments and secondly, they certainly do not recommend complete industry exclusion.

Guidelines are not mandatory or legally binding on governments, nor should they be misconstrued or misinterpreted as being such.

Governments need to ensure tobacco control policy making is not just led by departments of health, but that a “whole of government” approach is taken. It is essential that trade, finance, employment, agriculture and other relevant ministries are also involved to give their own views on:

International comparisons

A number of international governments do actually apply “Better Regulation” principles, which are a set of principles aimed at improving the quality of regulation including open and meaningful consultation of stakeholders. For example:
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In Australia, BATA plays an active and co-operative role on the Tobacco Industry Forum, working with Customs, Health and the Tax Office to fight illicit trade in Australia. BATA also worked co-operatively with the ACCC and the Department of Health in the implementation of Graphic Health Warnings on packaging and Reduced Fire Risk cigarettes.

The British American Tobacco Group complies with regulation and contributes to the economies of more than 180 countries worldwide – not only through the tens of billions of dollars in tobacco taxes that governments take each year globally but also through the 56,000 people it directly employs and the hundreds of thousands of others employed indirectly by the tobacco industry.

17. Tobacco In Australia, Facts and Issues: A Comprehensive Online Resource at 3.34, table 3.13, available at Tobacco in Australia website. These data derive from Wakefield M, Freeman J, Inglis G. Changes associated with the National Tobacco Campaign: results of the third and fourth follow-up surveys, 1997–2000. In: Hassard K, editor. Australia’s National Tobacco Campaign. Evaluation Report Volume 3. Canberra: Australian Government Department of Health and Ageing; 2004.
18. Klick, J., Research Regarding the Effects Of Package Design Including Plain Packaging - A Literature Review (December 2011) at 5.
19. Id. at 7, citing UK Department of Health “Evaluating the Impact of Picture Health Warnings on Cigarette Packs” (2010).
20. Viscusi K., Smoke-Filled Rooms: A Post-Mortem On The Tobacco Deal (2002) (“Viscusi (“2002”)).
21. Declaration Of W.K. Viscusi.
22. Viscusi 2002. Pages 147-148.
23. Pou v. British American Tobacco (NZ) Ltd, High Court New Zealand, Auckland CIV 2002-404-1729, 3 May 2006, Lang J. at 203.
24. Heirs of Mr. Zappetini v ETI SpA. Civil Court of Brescia - First Instance, II Division (judgment no. 3900/2005).
25. Amaya v Altadis et al., Court of Appeals of Madrid - XII Division (judgment no. 267/2005).
26. Heine v H.F. & Ph.F. Reemtsma GmbH - Court of Appeals of Hamm - (judgment 3 U 16/04).
27. McTear v Imperial Tobacco - Court of Session - Outer House - (judgment CSOH 69/2005).
28. Romer v BAT Manufacturing BV et al. - Civil Court of Amsterdam (Case No./Cause List No. 318074/HA ZA 05-1691/2008).
29. Gospodinov, Nikolay and Irvine, Ian J., “Global Health Warnings on Tobacco Packaging: Evidence from the Canadian Experiment,” Topics in Economic Analysis & Policy: Vol. 4: Iss. 1, Article 30 (2004) (“Gospodinov and Irvine (2004)”).
30. Page 67 of the PHRC Report.
31. Nicola Roxon, Australian Food and Grocery Council Dinner, Wednesday 28 October 2009
32. Office of Best Practice Regulation Website. “Effective Consultation and Effective Regulation” [Online]. Available at: Office of Best Practice Regulation.
33. Page 35 of the draft NTS.
[Accessed: 17/11/08]

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