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Malaysia

KLIA customs cripple cigarette, chewing tobacco smuggling bid

The Royal Malaysian Customs at Kuala Lumpur International Airport (Klia) crippled an attempt to smuggle in 2.56 million sticks of cigarette and 7,560 kg of chewing tobacco on Sunday.

The consignment was valued at RM400,000 with unpaid taxes amounting to RM2.2 million.

Klia Customs director Datuk Hamzah Sundang said three lorries and three local men aged between 26 and 34 years were intercepted at the cargo inspection section.

“The three lorries were found to be loaded with cigarettes and chewing tobacco without any declaration document to allow them to pass through the Klia customs cargo gate,” he told a media conference here today.

He said the three men had been remanded for seven days to assist in the investigation under Section 135(1)(a) of the Customs Act 1967.

Hamzah attributed the success of the case to the Coordinated Border Management (CBM) operation launched on Jan 15 to curb leakages and smuggling activities.

He said throughout the CBM operation conducted at the Klia Free Trade Zone, 30 cases of wrongdoing were recorded, of which 29 were issued compounds and one, prosecuted in court under the Customs Act.

“For the period between Jan 15 and March 6, 2017, RM295.66 million were collected throughout Ops CBM, an increase of 22.66 per cent compared to the same period last year, ” he said, adding that the operation was ongoing. — Bernama

Smoking kills, so stop protecting it

http://www.nst.com.my/news/2017/01/204184/smoking-kills-so-stop-protecting-it

JAMES Bond isn’t the only one with a licence to kill. The World Health Organisation reports that smoking costs the global economy RM4.5 trillion a year, and will take eight million lives annually by 2030.

For a species that has invented fire, travelled to space and split the atom, we are still paying an industry to kill us. Mankind is indeed strange.

Decades of research have shown that smoking can be fatal. So, we are often asked: if cigarettes cause such harm, why are they allowed to exist?

One challenge is the separation of the problem — the health industry sees tobacco as a health issue, while businesses and governments see it as an economic driver.

But the same WHO report also states that the cost of smoking far outweighs the revenue from tobacco taxes.

Treating smoking-related diseases drives up the cost of healthcare. In 2005, Malaysia’s Health Ministry spent 26 per cent of its budget to treat those diseases, which accounted for 0.74 per cent of its gross domestic product.

There are also the environment, productivity and human development — smoking pollutes our air and water, and smokers are 30 per cent more likely to miss work (for longer periods, too). In some families, money for cigarettes is taken from household essentials.

No other industry causes as much damage to its users and non-users alike — and remains legal.

Instead of protecting this industry, we urge the nation to support tobacco control efforts in Malaysia.

Tobacco control can work. A study published in the United States this month reports that efforts since 1964 had resulted in eight million fewer smoking deaths.

We should want the same for our fellow Malaysians.

MANDY THOO

National Cancer Society Malaysia

Not much proof that e-cigarettes can help people stop smoking

http://www.nst.com.my/news/2017/01/203391/not-much-proof-e-cigarettes-can-help-people-stop-smoking

As people become more aware of the dangers of smoking, many have taken steps to reduce the number of cigarettes smoked or to stop the bad habit. Public and private health centres and pharmacies provide smoking- cessation services, which include evidence-based treatment. These studies were based on large-scale population with medication that has been proven to be safe and effective. Nicotine replacement therapy (Nicorette) and Varenicline (Champix) have been used by those who wanted to quit smoking, and they have done so.

Interestingly, there is not much evidence supporting e-cigarette use as an alternative method for smoking cessation.

Recently, the Institute of Public Health, Health Ministry, conducted a survey on the use of e-cigarettes among adolescents and adults in Malaysia (The Tobacco and E-cigarette Survey among Malaysia Adolescents and The National E-Cigarette Survey 2016).

The results were disturbing. The majority of those who use e-cigarette are dual users. This means that they smoke cigarettes and e-cigarette. This is hazardous as it may result in nicotine overdose, which can lead to death. This can strengthen their addiction to nicotine, which hooked them to cigarettes in the first place.

Almost 70 per cent of the dual users stopped e-cigarette but continued smoking conventional cigarettes.

Most school children and adolescents started using e-cigarettes out of curiosity.

The main pull factors were the flavours and smell of e-liquids.

Many other dangerous substances can be introduced by drug pushers and dealers by just lacing the liquids.

Nearly 75 per cent of the study population felt that e-cigarettes were not useful to stop smoking and more than half wanted these to be banned.

DR RASHIDI MOHAMED PAKRI MOHAMED Nicotine Addiction Research Group, Universiti Malaya

Using e-cigs to quit smoking?

http://www.thestar.com.my/news/nation/2016/08/07/using-ecigs-to-quit-smoking/

A NEW study reveals that 95% of Malaysian vapers surveyed have either quit or cut down on smoking, while over 80% of them reported improved health.

“More than two-thirds stopped smoking all together. Among the 27% that didn’t quit, the average consumption of cigarettes dropped from 19 to four a day,” Greek cardio­logist Dr Konstantinos Farsalinos said at a recent interview in Kuala Lumpur.

Sharing the results of his latest study, the Onassis Cardiac Surgery Center and University of Patras researcher says over 7,000 adult vapers – 97% of whom were male – participated in the online survey which was in English and Malay. The average age of respondents was 30.

Over 5,500 ex-smokers and more than 1,500 smokers, who are also vapers, were asked about their experiences with e-cigarettes, and the results were consistent with those from the United States and Europe.

“Malaysian vapers, like their global counterparts, generally use advanced e-cigs and were able to reduce their nicotine consumption gradually, feel healthier and eventually quit smoking.”

This, Dr Farsalinos claims, is the largest cross-sectional survey of adult vapers in Malaysia and Asia. The survey is an extension of his 2014 study involving over 19,000 participants worldwide. While his earlier study on the characteristics, side effects and benefits of e-cigs found that 81% of those surveyed had quit smoking with e-cigs, he admits that there was little participation from Asia. The Malaysian survey, he says, fills the gap.

“The vaping community here is more organised compared with those in other countries in the region. They reached out to me early on. There are lots of questions but no data so it was important to do a study here,” he says, explaining why he decided to conduct his latest survey in Malaysia.

The lack of data, he feels, is why e-cigs are feared. While admitting that some fears are legitimate, he argues that sound policy must be based on facts and data, not fears.

The most common side effect of vaping is dry throat and mouth, he says, dismissing fears that smoking e-cigs would lead to addiction. According to his findings, tobacco cigarettes were the first nicotine product used by 92% of the respondents while 95% denied ever using e-cigs to inhale anything other than e-liquids.

The Health Ministry’s recommendation for e-cigs to be strictly regulated as a pharmaceutical product is a “big step backward”, says Dr Farsalinos, arguing that whether the e-cig is a pharmaceutical, tobacco or consumer product was dealt with in Europe three years ago.

“The e-cig is not medicinal so that argument was thrown out. The EU regulates it under its Tobacco Products Directive but there’s a sepa­rate category for the e-cig where it’s treated as a consumer product.”

He believes the devices should be regulated as a consumer product but with restrictions, like banning its sale to minors.

“Smokers aren’t stupid. They know their habit causes diseases that kill but they like it. Smoking is pleasurable. E-cigs give them the same pleasure.

“Malaysia adopts harm reduction when they tell motorists to wear a seatbelt. Why is this different?” he asks, adding, however, that e-cigs should only be the option for those who failed to quit smoking by themselves or after they’ve tried medication.

Prof Datuk Dr Abdul Razak Muttalif believes it’s better to err on the side of caution as the long-term effects of e-cigs on the body are still unknown and may take years to find out.

He is the chairman of the Health Ministry’s technical committee tasked with studying the health effects of e-cigs and shisha smoking and also a senior consultant chest physician and former director of the Kuala Lumpur Hospital Institute of Respiratory Medicine.

“Look how long it took before we knew that cigarettes cause diseases. As doctors we are very careful,” Dr Abdul Razak says when asked to comment on the Farsalinos study.

When the committee was formed in 2013, there wasn’t much data on e-cigs, he says, but some studies now show that e-cigs could have acute and long-term effects on consumers.

Worried about the nicotine in e-liquids, he warns that it could lead e-cig users to other addictions.

Universiti Malaya nicotine addiction specialist Assoc Prof Dr Amer Siddiq Amer Nordin is also concerned.

“A single survey conducted on mainly Internet users is inadequate to change the understanding of the danger or benefits of e-cigs. Besides the ongoing national study findings, there are a number of studies looking at the prevalence, mode of use, safety of e-liquids and safety to the environment. These are conducted by local universities. Let’s compare their data with Dr Farsalinos’ data.

“If e-cigs are found to be a useful quit-smoking agent in future, it should be regulated as a medicinal device. Still, abstinence is the best way to quit,” he says, adding that nicotine is governed by the Poison Act and its distribution is controlled.

Calling for a ban on e-cigs, the Consumers Association of Penang (CAP) believes that instead of helping smokers quit, e-cigs just cause them to spend more on a new habit.

CAP education officer N.V. Subbarow insists that many vapers are still smoking.

“Now we have another problem besides smoking. Worse still, teachers and parents are at a loss because kids who have never smoked are vaping now.”

CAP, he says, conducts weekly consumer education programmes in schools, addressing topics like vaping and e-cigs.

“Our survey of eight primary and secondary schools in Penang last year found 150 regular vapers among the students.”

Price increase hurts British American Tobacco’s results

British American Tobacco (M) Bhd’s (BAT) second-quarter financial performance was hurt by the continued impact of the November 2015 excise-led price increase, as well as the reduced consumption during the fasting month.

The company remains concerned with legal volumes continuing to be impacted by the current rampant illegal cigarette trade after the unprecedented excise increase in November last year that saw consumers down-trading within the legal market.

It cited a market research done by the Confederation of Malaysian Tobacco Manufacturers last December that discovered close to one out of two packs of cigarettes sold in the country was illegal.

The company said in a press release that the total legal domestic market experienced a volume decline of 26.3% in the first half of 2016, and pursuant to that, it saw a contraction in its domestic and duty-free volumes by 28.9% versus the first half of last year.

“The overall volume reduction and its consequent escalating cost pressures resulted in a total revenue decline of 16% and gross profit of 21.5%, both when compared to the first half of 2015.

“This fall in volumes is principally driven by the steep excise increase in November 2015 and the industry has yet to see any signs of recovery,” said BAT managing director Erik Stoel in the press release accompanying the results.

The company saw its second-quarter to end June net profit declining 78.2% year-on-year (y-o-y) to RM47.72mil, while revenue also saw a y-o-y drop of 11.5% to RM962.58mil.

The company has declared a dividend of 45 sen per share, which was a decline from the 78 sen per share dividend in the same period a year ago.

Concerns over survey on benefits of e-cigs

http://www.thestar.com.my/news/nation/2016/07/26/ecigs-helps-vapers-to-quit-smoking-survey-shows/

Experts have expressed their concerns over a recent survey on the implied benefits of e-cigs or vaping.

A researcher said 95% of Malaysian vapers surveyed have either quit, or cut down on smoking, while more than 80% of them reported improved health.

“More than two-thirds stopped smoking altogether.

“Among the 27% that didn’t quit, the average consumption of cigarettes dropped from 19 to four cigarettes per day,” Greek cardiologist Dr Konstantinos Farsalinos, a researcher at the Onassis Cardiac Surgery Center and University of Patras, told The Star.

Over the 7,000 adult vapers – 97% of them males – participated in the online survey. The average age of the respondents was 30.

Universiti Malaya nicotine addiction specialist Assoc Prof Dr Amer Siddiq Amer Nordin voiced his concern that a single survey conducted on mainly Internet users was inadequate to change the understanding on the dangers or benefits of e-cigs.

“Let’s see the ongoing national study findings and compare with Dr Farsalinos’ data.

“If e-cigs are found to be a useful quit-smoking agent in future, it should be regulated as a medicinal device.

“Still, abstinence is the best way to quit,” he said, adding that nicotine was under the Poison Act and its distribution should be controlled.

Over 5,500 ex-smokers and more than 1,500 smokers, who are also vapers, were asked about their experiences with e-cigs and the results were consistent with those in the US and Europe.

Prof Datuk Dr Abdul Razak Muttalif, chairman of the Health Ministry’s technical committee on e-cigs and shisha, said the long-term effect of e-cigs was still unknown.

“As doctors, we’re very careful,” said Dr Abdul Razak, who is also a senior consultant chest physician at the KL Hospital Institute of Respiratory Medicine.

He warned that e-cigs had long-term effects and could lead to other addictions.

The committee had recommended that e-cigs be strictly regulated as a pharmaceutical product in Malaysia.

Describing the move as a “big step backwards”, Dr Farsalinos said whether e-cigs were a pharmaceutical, tobacco or consumer product, was dealt with in Europe three years ago.

“E-cigs are not medicinal so that argument was thrown out.

“The EU (European Union) regulates it under the Tobacco Products Directive but there’s a separate category for e-cigs where it’s treated as a consumer product,” he said.

He added that e-cigs should be regulated as a consumer product but with restrictions like banning its sale to minors.

Calling for a ban on e-cigs, Consumers Association of Penang (CAP) said instead of helping smokers to quit, e-cigs are causing them to spend more on a new habit.

CAP education officer N.V. Subbarow said many vapers were still smoking. “Worse, teachers and parents are at a loss because kids who have never smoked are vaping now.”

Tobacco firms take a hit

More pain in store if excise duties hiked further

http://www.thestar.com.my/business/business-news/2016/06/18/tobacco-firms-take-a-hit/

LOCAL tobacco players have been hit hard by the 36% excise duty hike last November, with many lamenting that the move taken by Government was not done in a “fair” manner.

And should they be imposed with another round of tax hike later this year, more pain is in store for tobacco firms, as they have a harder battle to absorb costs to sustain their businesses, says JTI International Bhd (JTI Malaysia) managing director Guilherme Silva.

Guilherme, fondly known as Gui, says while the move was taken to curb cigarette consumption, it wasn’t eradicating the illegal cigarette trade. “We are working in an industry that is extremely regulated and we understand the Government’s objective.

“But the way it is being tackled will not solve the issue of high cigarette consumption nor help legal cigarette firms operate in such an environment,” Gui tells StarBizWeek in an interview.

Tobacco players in the country have so far seen three rounds of excise hikes, with the first 14% hike in September 2013, followed by 12% in November 2014 and a massive 36% hike in November 2015.

malaysia-illegal

And two weeks after the announcement, British American Tobacco (M) Bhd and JTI had gone on to hike prices of cigarettes.

“We are seeing the industry declining at a fast pace because of the steep increase in tax. And it’s difficult for us to sustain our business and cover costs in an environment that is already challenging,” notes the 35-year-old Brazilian, who was previously the general manager of JTI Cambodia.

Gui is the youngest so far appointed as JTI’s managing director. He took over from Rob Stanworth, who moved to another JTI market in Asia-Pacific.

The past six months has been tough and the continuous engagement with the various ministries hasn’t been easy, according to Gui.

“If I had to highlight the difference, Malaysia is the probably the eighth country I have lived in and I have never seen such high levels of illicit trade as in Malaysia,” he notes.

JTI Bhd, which lost its listing status after a compulsory takeover offer from its parent JT International Holding BV, has three cigarette brands in its portfolio – Mevius, Winston and Camel.

After the November 2015 excise hike, JTI enforced a 23% to 25% hike on its cigarettes. A pack of 20 sticks of Mevius, Winston and Camel now cost RM17, RM15.50 and RM16, respectively.

Despite the high taxes, he says cigarette consumption has been on an increasing trend.

As of 2015, a study conducted by the Health Ministry showed there were 4.44 million smokers, with an average daily consumption of 15 sticks per day or 24.3 billion sticks a year.

This is against 2011 numbers, which revealed 4.3 million smokers, with an average of consumption of 14 sticks per day, or 22 billion sticks a year.

sticks

However, Gui notes the reverse is seen in the industry’s volume where the number of legal cigarettes purchased in 2015 had reduced to 10.5 billion sticks versus 13.2 billion sticks in 2011.

This translates to about 8.8 billion sticks (or 40%) of illicit cigarettes in 2011 and 13.8 billion sticks (or 56.7%) in 2015.

“This goes to show that consumption of illicit cigarettes have increased significantly and this is a pressing issue for us,” says Gui.

While he feels that the Government is not achieving its target of reducing consumption, he says more smokers are now turning to illegal brands in the market.

Earlier in March, it was reported that the excise duty hike had caused smokers to switch to cheaper contraband brands, causing the Government to lose RM4bil in tax collection last year.

Additionally, research also found that 36.9% of cigarettes sold in the country last year were smuggled, which was an increase of 3.2 percentage points from 2014.

On that note, local industry players are of the opinion that the current excise hike strategy is pushing more consumers towards illegal cigarettes.

The industry is expected to be more challenging in the second half of the year.

On the move to implement plain packaging, Gui believes that if this is imposed, it will only make it harder to tackle illegal cigarette trade.

“Where purchasing power is concerned, Malaysia is perhaps the least affordable in the world,” he adds.

Based on JTI’s volume sales estimates from retails, he reveals that the industry’s volume is expected to decline by 28% in 2016 versus 10.5% in 2015.

“This is the biggest decline seen in the industry so far,” he affirms.

Meanwhile, the Confederation of Malaysian Tobacco Manufacturers said in March that the legal industry volumes had been severely impacted, registering a significant decline by about 30% post the unprecedented excise hike. It said excise revenue collection would be considerably lower than before November 2015.

Despite the challenges ahead, JTI has no plans to shut down its manufacturing plant in Shah Alam, as it is the regional hub and exports to 10 countries.

“Since it is the manufacturing hub for other countries, it has enabled JTI to compensate for the volume loss experienced so far in Malaysia,” Gui affirms.

With the rising number of smokers switching to vaping, Gui believes that although the industry is legitimate, it should be regulated.

Perturbed with the gloomy outlook in the second half of the year, Gui urges the Government to adopt a “wait-and-see” approach for the industry to stabilise prior to imposing another round of tax hike.

“We usually notice a strong decline in volume whenever a tax hike takes place and then it recovers a little. But we have not seen any recovery since the 36% hike last year,” he frowns.

JTI Malaysia is the country’s second-largest tobacco firm, with a market share of 20.7% as of May.

Boost for tobacco brands as poll confirms consumer fears over counterfeit impact of plain packaging

http://www.worldtrademarkreview.com/Blog/detail.aspx?g=82cde779-058b-483e-b19e-f76e579dc529

One of the arguments made against the introduction of plain packaging for cigarettes and other tobacco products is that the absence of branding would exacerbate the problem of counterfeiting, with potentially unsafe products becoming more accessible. As Malaysia lays the groundwork for a plain packaging regime, a recent poll of Malaysian consumers would seem to support that concern.

A nationwide survey carried out by the Merdeka Center for Opinion Research, on behalf of the Malaysia Singapore Coffee Shop Proprietors’ General Association (MSCSPGA), has found that 81% of Malaysians believe that plain packaging would make it easier for counterfeiters to produce fake tobacco products. Moreover, 65% of respondents are concerned that this would lead to an increase in criminal activity in the country; while 88% think that the introduction of plain packaging would boost sales of fake and smuggled cigarettes as smokers turn to the black and grey markets to buy cheaper packs. However, it is not clear if respondents believe this will happen as a reaction to the plain packaging itself and a desire for branded packs, or more simply because black and grey market alternatives sell for less.

To my knowledge, Malaysia is the only east Asian government that has so far announced plans to introduce plain packaging regulations for cigarettes and other tobacco products – though at this stage, the proposals remain far from concrete. “We are planning to do that in stages, but at this moment, we don’t have a firm date,” Chong Chee Keong, director of the disease control division of Malaysia’s Ministry of Health, told the Malay Mail back in February, adding that the government believes plain packaging measures would have the biggest impact on reducing smoking, particularly among younger and less frequent users. As expected, the announcement was met with support from health campaigners and opposition from the tobacco industry, which claims that such measures trample its trademark rights.

Smoking is prevalent in Malaysia, with the country’s Ministry of Health reporting approximately 4.7 million smokers out of a population of around 30 million as of April 2015. Smoking among males is particularly widespread, at 38%; older World Health Organisation data from 2008 puts this figure significantly higher, at 54.4% of the male population.

In any case, smoking remains a major public health issue in this rapidly developing country. With an estimated 20,000 deaths each year from directly smoking-related illness, it is clear why the government is keen to take action. Late last year, it increased excise tax on cigarettes by 40%, following a 12% hike in 2014, in addition to the recent introduction of a 6% goods and services tax. Tobacco companies raised prices as a result of these moves and argued that the government’s moves would further contribute to Malaysia’s already ingrained problems with counterfeit and grey market cigarettes.

According to the MSCSPGA, these account for about half of all of the cigarettes sold in the country at present. In Malaysia, where smoking is still legal in many public places and any bans that do exist are often not strictly enforced, cafes and restaurants – including those represented by the MSCSPGA – benefit from being able to sell tobacco products on their premises. Ho Su Mong, president of the MSCSPGA, told the Mail that fakes and smuggled cigarettes are costing retailers over 500 million ringgit (US$122 million) in lost income every year.

With this knowledge, it is clear why the MSCSPGA commissioned the survey and this economic interest will likely be pointed to by plain packaging proponents.

Nevertheless, the survey results will come as a much-needed fillip – albeit a small one – to trademark owners in the tobacco industry, and other sectors where plain packaging could potentially be implemented, at a time when they are most certainly on the back foot. Whether consumer concern causes the government to pause for thought remains to be seen.

Plain packaging protects human right to health — National Cancer Society

http://www.themalaymailonline.com/what-you-think/article/plain-packaging-protects-human-right-to-health-national-cancer-society

Representing various Malaysian groups and associations, the National Cancer Society is responding to the statement “Plain cigarette packaging an infringement against trademarks” that was published in the Malay Mail on 2 June 2016.

About 20,000 people die from tobacco related diseases every year in Malaysia. These deaths are preventable, many occurring among people who are still in their productive years.

In stretching the right to own intellectual property (trademark) as a fundamental human right, IDEAS should not stub out a very basic human right — the right to health.

The fundamental human right to health is violated when tobacco is sold in attractive packaging and when its users are ignorant of the real consequences of smoking.

According to World Health Organisation, tobacco-related illness is one of the biggest public health threats the world has ever faced. There is one death every six seconds in the world, and one death every 30 minutes in Malaysia.

There were about 4.5 million smokers in 2005 when Malaysia ratified the tobacco treaty, the WHO FCTC. Now, ten years later the Ministry of Health reports there are about 5 million smokers. This poses a big disease burden to the country.

As Health Minister Datuk Seri Dr S. Subramaniam has recently stated that anti-smoking campaigns are not effective in helping smokers curb their addiction, it is crucial that the country focuses on policy and regulation, including a tobacco act, to reduce smoking as well as the possible premature deaths of smokers.

Good health is wealth to the nation. Losing potentially millions of people still in their productive years is a tremendous economic loss to the country. The business sector has ignored that an increase in the number of sick people results in loss of productivity.

There are 16 types of cancers associated with smoking. The number of new cancer cases is projected to increase from 37,000 cases in 2012 to about 56,000 in 2025.

According to the Ministry of Health tobacco use accounted for 35 per cent of in-hospital deaths in Malaysia, mainly from cancer, heart disease and stroke.

Plain packaging is a decision from the WHO FCTC and not applicable to other products. Hence it is misleading for IDEAS to say there has been an international trend towards plain packaging for different items such as alcohol, sugary foods and toys. There is no such trend.

Plain packaging was recommended in the WHO FCTC Guidelines as part of a comprehensive approach to tobacco control that includes large graphic health warnings and comprehensive bans on tobacco advertising, promotion and sponsorship. The Malaysian government along with other countries (now 180) adopted these guidelines in 2008.

IDEAS claims that plain packaging prohibits the use of trademarks. According to the WHO Director-General, Dr Margaret Chan, “Plain packaging reduces the attractiveness of tobacco products. It kills the glamour, which is appropriate for a product that kills people.”

Besides Australia, the UK, France and Ireland are now implementing plain packaging. The tobacco industry challenged plain packaging in these countries with the intellectual property argument and lost. The intellectual property laws of these countries remain robust. Australia has among the lowest smoking prevalence in the world.

It is heartening to see many other countries moving forward with their plain packing legislation.

It is time to stop the senseless deaths. We fully support the government to implement plain packaging of tobacco.

* This is the personal opinion of the writer and does not necessarily represent the views of Malay Mail Online.

Plain cigarette packaging an infringement against trademarks

https://www.malaysiakini.com/letters/343832

We write as a coalition of 47 (paid to) think-tanks, advocacy groups and organisations in response to proposed plain packaging tobacco control measures, and by the announcements by several countries of their interest in such policies.

Firstly, the right to own property is a fundamental human right. Thus, the protection of property rights, physical and intellectual, is critical. Creating an environment where property rights are protected and legally enforced contributes to social and economic growth and stability.

Intellectual property rights (IPR) promote trade in developed and emerging economies. The importance of secure intellectual property rights is recognised in international treaties and conventions.

As highlighted in various studies and indexes, there is a strong positive correlation between a country’s robust intellectual property rights enforcement and gross domestic product (GDP) per capita. Additionally, the protection of intellectual property rights is crucial to the economic development of every country. This is why intellectual property rights advocates are concerned with the discussion of plain packaging policies around the world.

We, the undersigned organisations, stand against the infringement of trademarks through plain packaging. Plain packaging prohibits the use of trademarks and therefore significantly erodes the value of this intellectual property – a dangerous precedent to set for commerce in general. Denying a manufacturer the right to use its trademark to identify its product strikes at the very core principles of corporate identity and freedom.

Governments all across the world have championed the success of plain packaging (PP) and its ability to curb smoking. Yet the data suggests that the plain packaging efforts may not be as successful as these governments would have the public believe with smoking rates actually increasing in a number of Australian states in the year following the policy’s implementation.

However, the Australian National Drug Strategy Household Survey (NDSHS) 2013 data suggests that youth daily smoking may have increased from 2.5 percent in 2010 (under branded packaging) to 3.4 percent in 2013 which was the first year of plain packaging.

But, RMIT University Professor Sinclair Davidson has raised serious concerns about the results of the Australian government’s Post-Implementation Review 2016, where the results show a dramatic decrease in smoking after the introduction of plain packaging.

Professor Davidson showed that the trend line was deliberately engineered to attribute any falling smoking prevalence to plain packaging. The econometric analysis in the PIR also omits a price variable; making implicitly the incorrect assumption that price plays no role in an individual determining whether or not to consume tobacco. Thus, the Post-Implementation Review about the successes of plain packaging in Australia should be viewed with scepticism.

A critical way to provide brand information

Trademarks, brands, and logos are a critical way to provide brand information to consumers which is an assurance that they are purchasing a legitimate, quality product.

When this brand information is silenced through policies such as plain packaging, it has dangerous effects for consumers. For example, there has been a 24 percent increase in the consumption of illicit tobacco in Australia since plain packaging took effect.

By not allowing companies to use their trademarks, plain packaging forces consumers to make uninformed decisions and in many cases puts them in danger by forcing them to enter the illicit ‘black’ market in search of goods.

There has been an international trend toward plain packaging for different items such as alcohol, sugary foods, drinks, and even baby formula and toys. Indonesia has threatened to introduced plain packaging plans for alcoholic products.

The Australian government is now considering introducing graphic warning labels on alcohol, sugary drinks and food products the government believes could be considered unhealthy. South Africa has gone even further and has introduced plain packing like regulation on baby formula for infants and young children. This also includes prohibitions on any photo except those showing the correct method to preparing and using the product.

Additionally, the baby formula label cannot advertise any other designated product. Most outrageously, plain packaging has even been suggested for toys, with the argument that some toys reinforce boys to be ‘macho’ and girls to be ‘submissive’, therefore, proponents demand a public campaign for plain packaging on toys for children.

Countries renowned for their robust defense of property rights drive economic growth and stability. Weakening IPR is not only detrimental to the economy, but it can also place the public’s health and safety at risk. In order for countries to reach or remain economically successful, it needs to robustly protect and enforce IPR.

We urge governments around the world to focus on strengthening the protection of intellectual property rights instead of infringing on them by pursuing detrimental trademark infringement policies such as ‘plain packaging’.

The letter is signed by 47 (paid to) think tanks, advocacy groups and organisations and can be located here.
________________________________________
The Property Rights Alliance (PRA) based in Washington DC, USA stands as an advocacy organisation dedicated to the protection of physical and intellectual property rights.

Property Rights Alliance

This group works to influence legislation in opposition to the estate tax, environmental protection, licensing restrictions, federal purchase of land for national parks and wildlife areas, broadcast requirements for “multicasting,” and drug importation, as well as seizure by eminent domain.[44]