* Supermarket sales data inconclusive
* Australian government withholds retail sales data
* Big Tobacco data claims no impact from plain packaging
* Challenges remain bogged down in WTO
By Jane Wardell
SYDNEY, April 3 More than a year after Australia
became the first country to introduce plain packaging for
cigarettes, there is little hard evidence to prove the
trailblazing move is worth emulating.
Challenges to the stringent laws remain bogged down in the
World Trade Organization (WTO) and the tobacco lobby is taking
control of a debate characterised by a paucity of data.
At the King of the Pack tobacconist in central Sydney, James
Yu shakes his head despondently as he says his cigarette sales
volumes have plummeted 30 percent over the past year.
Yu's sliding sales should be music to the ears of the
Australian government, a vindication of laws introduced in
December, 2012, that forced tobacco companies to replace logos
and branding with graphic images of smoking-related diseases on
an olive green background.
Cigarette sales in supermarkets, which account for a large
portion of the market, shrank 0.9 percent overall by volume in
2013, according to the latest data available from Retail World,
but there is no clear link to the plain packaging laws.
The Retail World supermarket sales data also showed that
while sales volumes of "mainstream" and "premium" cigarettes
fell by 8-9 percent, "value" brand sales rose 12.9 percent, a
jump Big Tobacco has seized on as supporting the theory that
smokers are trading down in response to the legislation.
For his part, Yu says his business has been slowed not by
the new packs but by old-fashioned monetary deterrents - a 12.5
percent rise in tobacco excise at the end of 2013 that increased
pack prices from an average A$17.50 to A$19.70.
"Smokers don't mind plain packaging actually, the critical
thing is the price hike," Yu says from his cramped booth, a view
that is supported by other sellers polled by Reuters.
With the tax rise appearing to pack a bigger punch than the
costly introduction of plain packaging a year earlier, the
Australian government has been accused of not doing enough to
defend its legislation, presenting a potential stumbling block
for other countries looking to follow in its footsteps.
New Zealand, France, India, South Africa and Britain are all
considering adopting standardised packaging on tobacco products.
The Australian government says the key objective of the
policy is to reduce the attractiveness of tobacco products to
consumers, particularly young people.
The goal of reducing smoking rates, it says, is a long-term
measure and it is too early properly to judge plain packaging a
success or failure on those grounds.
Still, the lack of data is frustrating the anti-smoking
lobby and allowing Big Tobacco to step into the void and
dominate the debate.
The cost to the industry of the Australian legislation
spreading globally is considerable. London-listed Imperial
Tobacco Group saw $1.6 billion wiped off its value in
one morning last November after the British government announced
a review into whether plain packaging would reduce the human and
financial cost of smoking.
The Australian government does not publicly release retail
sales data on the basis that the market, which is dominated by
Imperial, Philip Morris International and British
American Tobacco, is so tightly held that doing so
would reveal sensitive commercial information.
Official data has been restricted to a survey conducted in
late 2012 during the pack changeover, when smokers reported more
of an inclination to quit, and a report at the start of 2013
from the smoking cessation helpline, Quitline, showing a 78
percent surge in calls associated with plain packaging.
A monthly tracking survey of smokers and recent quitters to
gauge the effect of the legislation since it came into force on
Dec. 1, 2012, is due for release later this year.
"The tobacco plain packaging measure is an investment in the
long term health of Australians and the full effects of the
measure will be seen over the long term," Kay McNiece,
spokeswoman for the Department of Health, said in an email.
"However, based on recently published independent,
peer-reviewed research, early indications are that the tobacco
plain packaging measure is having an effect."
Critics, however, say that the government-sponsored research
is self-reported by smokers, a notoriously unreliable measure.
"The government now has 12 months of data. Why is the
government withholding data?" said Simon Chapman, professor of
public health at the University of Sydney.
McNiece said the Health Department does not have access to
official sales data and declined to comment on whether it was
looking at measures other than self-reported activity.
Industry sales figures released by Marlboro maker Philip
Morris last month showed a 0.3 percent increase in deliveries of
tobacco to retailers last year - the first rise in at least five
That data made headlines but lacked detail and failed to
take into account a likely bump from restocking with new packs
in 2013, said Mike Daube, a professor of health policy at Curtin
University in Perth.
"To make claims of this kind without providing any evidence
is clearly a desperate attempt to influence the UK report."
Clayton Ford, a spokesman for Philip Morris in Australia,
said the U.S. company recorded steady sales by both volume and
value last year even as it announced this week it was ending
production here after 60 years.
The decision to close its factory in Victoria state had
"absolutely no impact from plain packaging", and was instead a
result of government restrictions on manufacturing that impeded
its exports to Asia, Ford said.
Philip Morris is challenging the plain packaging laws under
Australia's Bilateral Investment Treaty with Hong Kong, arguing
that it is being deprived of its intellectual property rights.
The legislation is also bogged down in the WTO where a case
launched by Ukraine - and later joined by Indonesia, Cuba,
Honduras and the Dominican Republic - to overturn the law,
funded at least in part by one or more tobacco firms, has been
running for more than 2 years.
Frustrated at the glacial pace of the complaints, Australia
last month took the unusual step of speeding up one of the
complaints against itself.
"All of those delays are in the industry's favour," said
Tania Voon, a professor at the University of Melbourne law
school. "It knows that as long as the cases go on without a
resolution, other countries are less likely to follow."
Experts says that part of the problem in using Australia as
a test case is that it is a mature market.
Unlike most developing countries where smoker numbers are
growing, Australian smokers have been in steady decline for some
years, leaving a group less inclined to kick the habit.
Australia wants to cut the number of people who smoke from
around 15 percent of the population to 10 percent by 2018.
Health authorities say smoking kills 15,000 Australians each
year with social and health costs of around A$32 billion.
(Additional reporting by Maggie Lu YueYang in Sydney; Editing
by Mike Collett-White)