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

Jun 16th, 2016
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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

Jun 8th, 2016
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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

Jun 2nd, 2016
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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]

Health Ministry rapped over tobacco plain packaging plans

May 25th, 2016
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http://www.thestar.com.my/news/nation/2016/05/25/health-ministry-rapped-over-tobacco-plain-packaging-plans/

KUALA LUMPUR: A DAP lawmaker has criticised the Health Ministry for backtracking on its plans to implement plain packaging for tobacco products.

Klang MP Charles Santiago said the ministry had previously announced plans to introduce generic packaging for tobacco products to reduce brand recognition and consumption.

“The ministry’s director of disease control division Dr Chong Chee Keong said this on Feb 24.

“He even suggested that standardised colours and fonts be used in the packaging in stages,” Santiago told a press conference in Parliament lobby Wednesday.

He said the statements suggested that the ministry had an implementation plan and strategy for plain packaging.

Santiago noted that Health Minister Datuk Seri Dr S. Subramaniam had said in a parliamentary response on Monday that the ministry had to undertake public consultations before implementing plain packaging.

“This clearly shows that the Government has backed off from its original position and reversed the plain packaging policy,” he said.

Santiago said the Government should not buckle under pressure from the tobacco industry and stressed that the ministry should acknowledge the opinions of health groups.

“The tobacco industry and lobby groups have cautioned the Government that introducing plain packaging would violate international trade laws.

“It is unacceptable that the ministry chooses to ignore the opinions of health groups and instead listen to business corporations,” he said.

He urged the ministry to keep to its plan and implement plain packaging ahead of the World Health Organisation’s Tobacco Day.

The ministry has yet to respond on the issue.

Enough is enough

May 14th, 2016
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http://www.nst.com.my/news/2016/05/145539/enough-enough

IN the fight against the dangerous drug menace, which has been an intractable problem in the country for decades, education is key.

This is opportune as news of a dominant tobacco-related company reportedly “closing down its manufacturing facility” near the capital city cannot be more encouraging.

Couple this with the claim that “the sale of the land” and that the shareholders have endorsed the move, the reason to enhance the role of education is even more.

After all, tobacco-related products, namely cigarettes, are addictive and are dubbed the “gateway” to drug abuse. This is the first important lesson.

If the deputy prime minister-cum-home minister expressed shock when he learned that children as young as 7 were hooked on drugs, he would be devastated to know that this is “normal”.

Statistics show that the starting age for smokers is getting lower over the years, not just among men but women, too.

So, the “closure” of any tobacco manufacturing and sales outlets must be taken as a sign of success.

It is virtually impossible to justify, in educational terms, how such an industry continues to bring “value” to its shareholders when it takes away the lives of those who use its products or, otherwise, markedly destroy their quality of life due to diseases as a result of smoking.

The tobacco industry has admitted this by displaying the gruesome pictures on the packaging.

Similarly, no government should allow its citizens to suffer at the hands of such an unconscionable company that eventually kills its customers. Our government acted by hiking the prices of cigarettes.

Between 2013 and last year, three rounds of excise hikes were recorded — 14, 12 and 36 per cent.

Research has indicated, over and over again, that putting prices beyond the reach of smokers and potential ones is one of the most effective ways of tobacco control worldwide.

The rationale is that the number of those “dying” when deprived of cigarettes in no way comes close to the number who are sure to die prematurely from smoking, including children. Still, the prices of cigarettes in Malaysia are not high enough to have that impact.

While the industry claims that the move leads to widespread distribution of illicit cigarettes, this is surely part of its tactics to keep prices low.

Blowing up the argument about cost and revenue loss from such illicit sales has always been done at the expense of conveniently ignoring the “loss” and “cost” incurred in paying high and long-term health bills arising from smoking.

Hence, the recent report that police busted a Johor-linked tobacco-smuggling activity worth more than RM25 million must be applauded and those involved be recognised, if not rewarded, just like how the smugglers are “incentivised” by their paymasters.

The main counterpoint here is often “corruption” will make the action against smuggling more elusive.

In short, all parties fighting in the tobacco killing field must be highly ethical and professional in educating the “sacredness” of life.

In the final analysis, if the drug war is to be won, it must have educational perspectives all the way, by pointing out the flaws in the arguments and systems, and demonstrating that tobacco can be effectively controlled, if not eliminated, as the “gateway” substance.

The time has come to frame this into a new strategy with the “retreat” of a dominant tobacco company. It sets the scene for a new narrative sans tobacco in our midst and telling it as it is for all kinds of addictive drugs, ranging from tobacco to the latest there is, including vaping.

There are no two ways about it. As the saying goes, good riddance to bad rubbish. Enough is enough.

DZULKIFLI ABDUL RAZAK, Honorary professor at University of Nottingham and principal fellow at Faculty of Leadership and Management at Universiti Sains Islam Malaysia

Malaysia’s Top Pension Fund Plans Tobacco Stake Exit, CEO Says

May 13th, 2016
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http://www.bloomberg.com/news/articles/2016-05-13/malaysia-s-top-pension-fund-plans-tobacco-stake-exit-ceo-says

Malaysia’s $170 billion pension fund plans to sell its stake in British American Tobacco Malaysia Bhd. as it focuses on investing in assets deemed socially and environmentally responsible, Chief Executive Officer Shahril Ridza Ridzuan said.

The Employees Provident Fund has a 6.9 percent stake worth about 942 million ringgit ($234 million) in the Malaysia-listed company, according to data compiled by Bloomberg. EPF doesn’t have a specific timeline to sell its holdings, Shahril said.

“We are conscious that we don’t invest in gambling, alcohol or alcohol-related business,” Shahril said. “Historically, we have this stake in the tobacco company and that we will gradually over time look at disposing.”

The fund also won’t make any new investments in tobacco, he said.

A divestment would coincide with a broader global shift among money managers to increase exposure to investments considered socially responsible. Worldwide so-called sustainable assets under management grew 61 percent to $21.4 trillion from 2012 to 2014, according to a report by the Global Sustainable Investment Alliance. Yet Asia accounted for only $53 billion of the total — compared to Europe’s $13.6 trillion.

Malaysia’s stock exchange launched the FTSE4Good Bursa Malaysia Index in December 2014, comprising companies with “recognized corporate responsibility practices,” according to its website. The index, which includes Malayan Banking Bhd. and Petronas Chemicals Bhd., is down about 8.9 percent over the past 12 months, Bloomberg data show.

Malaysia’s sovereign wealth fund Khazanah Nasional Bhd. is considering paring 2 percent of its holdings in Tenaga Nasional Bhd., IHH Healthcare Bhd. and Axiata Group Bhd., people familiar with the matter said earlier this week. EPF owns shares in all three companies, and Shahril said the pension fund may look at increasing its stake should Khazanah sell.

“We don’t rule out the possibility,” Shahril said. “It all depends on whether the price makes it worthwhile for us to look at, from a risk-return point of view.”

The Kuala Lumpur-based fund recorded 44.2 billion ringgit of gross income from investments last year, 13 percent more than it earned in 2014, according its latest annual report. EPF had 684.3 billion ringgit in assets at the end of last year, with 51 percent invested in fixed income and 43.8 percent in equities, the report said.

Vape, e-cigarette regulations ready by year-end, says Dr Subra

May 11th, 2016
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http://www.thesundaily.my/news/1798388

PUTRAJAYA: Regulations for vape and e-cigarette products for both manufacturers and end-users will be ready by year-end.

Health Minister Datuk Seri Dr S Subramaniam said his ministry will be one of the regulators for the comprehensive set of regulations which are currently being fined tuned.

“Once the regulations are finalised, we will present it to the Cabinet. Right now the ministry with the help of other agencies under various ministries are drawing up the rules,” Subramaniam told a press conference today.

Meanwhile, commenting on the dengue situation, he said health officers have been monitoring and spraying larvicide at high risk areas.

Time for a Tobacco Act, says MCTC

Mar 11th, 2016
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http://www.freemalaysiatoday.com/category/nation/2016/03/11/time-for-a-tobacco-act-says-mctc/

Council chief Cheah says Putrajaya must have the political will to control tobacco use.

PETALING JAYA: The Malaysian Council for Tobacco Control (MCTC) has alleged that the government lacks the political will to control tobacco use to ensure that young Malaysians don’t develop the smoking habit.

Speaking to FMT, MTMC President Molly Cheah said she hoped Putrajaya would use the time allocated under the Trans-Pacific Partnership Agreement (TPPA) to finally come up with a Tobacco Act.

Countries committed to signing the TPPA are given two years to amend existing laws or enact new ones before the agreement comes into effect.

“Malaysia is backward compared to other countries who are signing on to the TPPA,” she said. “It still doesn’t have a proper act in place to control the use of tobacco.”

Instead, she said, the government seemed content to control tobacco use through what she called an “archaic” provision of the Food Act 1983.

However, Cheah commended the Ministry of Health for planning to implement a rule requiring plain packaging of tobacco products, saying the measure had shown positive results in other countries.

“We are fully supporting the move and hope that the government will implement plain packaging as soon as possible as it’s shown to be a very effective means to control the use of tobacco.”

She dismissed the notion that the move would have repercussions on intellectual property rights, noting that Australia, one of the TPP partners, was already successful in implementing it.

Malaysia Gov’t plans to introduce plain packaging for tobacco

Feb 24th, 2016
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http://www.freemalaysiatoday.com/category/nation/2016/02/24/govt-plans-to-introduce-plain-packaging-for-tobacco/

PETALING JAYA: The Health Ministry plans to introduce generic packaging for tobacco products with the aim of reducing brand recognition and ultimately reducing overall consumption, Malay Mail Online reported today.

According to the report, the Health Ministry’s director for the disease control division Dr Chong Chee Keong, said plain packaging would greatly impact the prevalence of smoking among new and light smokers.

Chong said there were plans to introduce the plain packaging using standardised colours and fonts in stages but that no specific date had been set as yet.

When asked if the Trans-Pacific Partnership Agreement (TPPA) would affect the plan, Chong said the treaty had yet to be tested.

In 2012, Australia became the first nation to mandate plain packaging for cigarettes, in a bid to reduce smoking rates among its citizens.

Other nations that adopted the move later were France and Britain, much to the unhappiness of big tobacco firms including Philip Morris International, British American Tobacco, Imperial Tobacco and Japan Tobacco International.

These firms have since launched legal challenges against such laws, arguing the move had impinged on their trademark intellectual property.

In Australia, four tobacco firms including Philip Morris lost their legal challenges against the law.

Impact of Graphic Pack Warnings on Adult Smokers’ Quitting Activities

Feb 1st, 2016
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Impact of Graphic Pack Warnings on Adult Smokers’ Quitting Activities: Findings from the ITC Southeast Asia Survey (2005–2014)

https://www.cambridge.org/core/journals/journal-of-smoking-cessation/article/div-classtitleimpact-of-graphic-pack-warnings-on-adult-smokers-quitting-activities-findings-from-the-itc-southeast-asia-survey-20052014div/94911E5069DE323D2E1FE458F564DB3A

Abstract

Malaysia introduced graphic health warning labels (GHWLs) on all tobacco packages in 2009.

We aimed to examine if implementing GHWLs led to stronger warning reactions (e.g., thinking about the health risks of smoking) and an increase in subsequent quitting activities; and to examine how reactions changed over time since the implementation of the GHWLs in Malaysia and Thailand where GHWL size increased from 50–55% in 2010.

Data came from six waves (2005–2014) of the International Tobacco Control Southeast Asia Survey.

Between 3,706 and 4,422 smokers were interviewed across these two countries at each survey wave.

Measures included salience of warnings, cognitive responses (i.e., thinking about the health risks and being more likely to quit smoking), forgoing cigarettes, and avoiding warnings.

The main outcome was subsequent quit attempts.

Following the implementation of GHWLs in Malaysia, reactions increased, in some cases to levels similar to the larger Thai warnings, but declined over time.

In Thailand, reactions increased following implementation, with no decline for several years, and no clear effect of the small increase in warning size. Reactions, mainly cognitive responses, were consistently predictive of quit attempts in Thailand, but this was only consistently so in Malaysia after the change to GHWLs.

In conclusion, GHWLs are responded to more frequently, and generate more quit attempts, but warning wear-out is not consistent in these two countries, perhaps due to differences in other tobacco control efforts.

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