Plain packaging will cost revenue, but bring health savings

The State may lose tax revenue through the introduction of plain packaging for tobacco products but this will be offset by savings from reduced deaths and illness linked to smoking, according to a Department of Health study.

While the Government may incur costs from possible legal challenges to the legislation from the tobacco industry, the legislation will result in a reduction of smoking-related health costs, estimated at more than €660 million a year.

The tobacco industry is increasingly turning to packaging, particularly the cigarette pack, as a “key marketing tool” in response to restrictions on advertising, promotion and sponsorship, according to the department’s regulatory impact analysis of introduction of the Public Health (Standardised Packaging of Tobacco) Bill.

"The evidence indicates that tobacco packaging is a critically important form of tobacco promotion, particularly in jurisdictions with comprehensive advertising and marketing restrictions, such as Ireland. "

Standard packaging is the latest strand of tobacco control legislation aimed at “denormalising” smoking in Ireland and is designed to complement earlier initiatives, it says.

“The tobacco industry has invested heavily in pack design in order to communicate specific messages to targeted demographic groups. As most smokers start when they are children and there is evidence of considerable brand loyalty among older smokers, packaging elements are by definition directed mainly at young people.”

Former Minister for Health James Reilly got Cabinet approval for the legislation last June, weeks before he left office. The Bill would ban the use of logos on packaging or on cigarettes.

Ireland would be the first EU member state to introduce plain-packaging legislation, prompting anxiety in the global tobacco industry that an Irish law could set a precedent for Europe.

The department study says packaging has long been regarded as “the silent salesman” and tobacco packaging can be considered as mobile billboards. The department says evidence shows tobacco branding works in three ways:

Packs are designed to be attractive and to communicate the personality of the brand. “They can act as badge products which become a part of a person’s identity – particularly relevant for young people in the process of establishing a self-identity.” Lighter-coloured packs mislead consumers, falsely suggesting some tobacco products are healthier than others.

Branding on packs reduces the prominence and effectiveness of health warnings. Although the tobacco industry claims the plain packaging will lead to a rise in smuggling, the document says the Revenue Commissioners and Garda Síochána have "refuted" this claim. The legislation is unlikely to have a significant impact on Revenue's work in combating the illegal tobacco trade.