PLAIN PACKAGING: NZ MUST CAREFULLY CONSIDER THE REAL WORLD IMPACTS

MEDIA RELEASE
May 2014
Having appeared before the Health Select Committee to detail the tobacco plain packaging experience for Australian retailers, Australasian Association of Convenience Stores (AACS) CEO Jeff Rogut has commended the New Zealand Parliament for undertaking a wide ranging review and engaging broadly with industry before committing to such a major and potentially damaging step to businesses.
Mr Rogut took the opportunity to reinforce the real world implications that tobacco plain packaging policy has had for retailers in Australia, where it was introduced despite no evidence it would have any impact on the incidence of smoking.
He said it was important that actual impacts and feedback from retailers be considered now, with plain packaging having been in operation in Australia for 18 months, instead of focusing on theoretical studies completed prior to the introduction of the legislation.
“The additional costs that small retailers in Australia have been forced to absorb as a direct result of plain packaging have seriously impacted their bottom line,” Mr Rogut said.
“The cost burdens associated with additional staff training, labour, product handling errors, increased inventory management procedures and customer frustration have been substantial.
“These impacts were always obvious to retailers – those at the front line. This is why it was so disappointing for the Australian Government to introduce such a destructive measure without consultation with industry and with no evidential basis.
“Unsurprisingly the policy, to date, has backfired. The volumes of legal tobacco sold remain constant and in some cases, as reported in the recently released AACS 2013 State of the Industry Report, actually continued to increase, while the black market trade of tobacco in Australia has escalated to unprecedented levels.
“Encouragingly, New Zealand is taking a more thorough and considered approach to the plain packaging debate. The Australian experience has proven overwhelmingly that education is the most effective way to reduce the incidence of smoking,” he said.
The following is a selection of recent direct quotes from retailers outlining some of the actual experiences of tobacco plain packaging in Australia:
“When placing orders more time is spent as all packets look the same. Mistakes are made if a staff member places stock in the wrong spot. Previous to plain packs, it never happened.”
“Deliveries are much harder to check off, extra time is taken.”
“The biggest impact is at point of sale, in the filling of cabinets and locating product(s) for the customer.”
“When stock is filled out in the shop, wrong stock is being placed in wrong spots by staff.“
“New staff find it hard to learn where stock is. It is difficult with products at the bottom of the shelf, as they are hard to read. It takes extra time to serve customers as well, with new staff needing time to find (cigarettes).”
“Customers can ask for the wrong product as well, normally they don’t realise until they have taken a (cigarette) out and lit it. Then they try to return and abuse staff when this is declined.”
“The sales in my store have moved away from the big name (brands), moving to the cheap labels. I admit that this is because of price, but also the fact that they all look the same.”
“The single biggest issue is the tailor made chop chop as it is now available packaged and branded, it has moved way past the perceived bag of loose tobacco that chop chop implies.”
“Chop chop has increased in my area as a result as well. Once again I admit price has something to do with it, but also a large part is played by plain packaging. It all looks the same, the chop chop people don’t have to do much to make it look better than plain packaging, a white box is all they need, in fact. There is a disconnection from perceived quality when the stock comes in the same colour and not the branded pack.”
“It is this first hand experience from those working in the industry every day that should be considered, not theoretical studies done in artificial environments prior to the introduction of plain packaging and which have proven to have no basis in fact,” Mr Rogut said.
Further information:
Jeff Rogut
Chief Executive Officer
Australasian Association of Convenience Stores
Ph: +61 467 873 789
Media enquiries:
Stephen Naylor
Wise McBaron Communication
Ph: +61 (2) 9279 4770