A Spoon Full of Sugar for Plain Packaging

Posted on Jun 9, 2014

A Spoon Full of Sugar for Plain Packaging

History has taught us that the South African Government, and the Legislature in particular, will not hesitate to make bad law. The volume of carelessly drafted, ill conceived, unconstitutional and overtly political laws that the public has been force-fed in recent years is so great that recourse to the Constitutional Court has become a pedestrian matter.

In fact, the alarm felt over perpetual ham-handed law making is only outstripped by Government’s brazen disregard for public cooperation in the democratic process. This even after the public, who are expected to prop up and thereafter obey each new law, has demonstrated to Government the gross socio-economic detriment that follow as a result of it.

Plain packaging is a perfect case in point. Ever since Parliament abolished the process of expert-committee drafting, most new laws have been produced by means of a photocopier from a staggering array of random foreign laws, opaque internal policy and input from political pressure groups. As a result, when the plain packaging bandwagon came around, Government jumped aboard bodily. It has since imported foreign law for plain packaging of baby food, drafted a zero compensation measure to expropriate (read more here) and in some cases destroy any property for reasons of public health and has hinted at plain packaging for tobacco products and alcoholic beverages.

In the case of tobacco plain packaging, Government went so far as to state that it would mimic the Australian example despite being warned of the fact that under South African law such a measure would be unconstitutional. Fortunately, South Africa has not yet taken the plunge and may therefore yet be persuaded to abandon this ill-fated plan.

To this end, the Australian experience with tobacco plain packaging is instructive. Recent reports (read more here, here, here and here) in the Australian media indicate that the most robust anti-smoking laws in the world are backfiring. Apparently, in the past 18 months after the introduction of plain packaging, sales have increased by as much as 59 million cigarettes. This reversed the 15.6% decline in sales over the previous 4 years and established a 0.3% rise in sales since the introduction of plain packaging. These figures, from an industry monitor report by InfoView, are supported by the Australian Association of Convenience Stores which reported a 5.4% increase ($120 million) in the sale of cigarettes over the past year.

These results are heralded as the first concrete data available on the impact of plain packaging and said to disprove everything the Australian minister of health claimed about the efficacy of State intervention in tobacco branding. Conversely, some commentators dismissed the InfoView report as misleading and incorrect while the Australian Government refers to figures by the Australian Bureau of Statistics’ for the period 2001 to 2012 which show a decrease in smoking, although there is no evidence to suggest that the decrease is related to plain packaging. A similar finding was published in a study by London Economics in November 2013, which showed no change in tobacco consumption in Australia after the introduction of plain packaging.

Be that as it may, both sides report an increase in the sale of low-price cigarettes, despite the fact that the Australian Government raised the excise duty of tobacco products along with the ban on tobacco branding. Furthermore, the Australian plain packaging debate has raised concerns about its impact on illicit importation of goods, particularly tobacco products, to the country.

Both of these facts are of great significance to South Africa. Clearly there is some indication that plain packaging has failed to curb smoking and has in fact, by further stigmatising the use of tobacco, imbued it with a certain charm to particularly younger consumers. However, the fact that an increase in the sale of cheap cigarettes has followed on plain packaging illustrate that the rationale for such legislation (namely to discourage users from smoking or taking up smoking) has not been served.

When this is coupled with the risk, as explained by eminent IP scholar Judge Prof Louis Harms, that plain packaging plays into the hands of counterfeit goods manufacturers and importers of such contraband products, plain packaging legislation appears ineffective and counter-productive.

In the South African context this means that if Government was to weather the inevitable storm that will follow plain packaging legislation it will deprive tobacco trade mark proprietors of their intellectual property for a reason that has been proven to be false. The logic is inescapable – plain packaging is proven to be, at least, ineffective to curb smoking and in fact increases the consumption of mainly cheap cigarettes and operates to stimulate the manufacture and smuggling of tobacco products. This means that the inevitable challenge to plain packaging on constitutional grounds is likely to succeed because a deprivation of such property (the tobacco trade marks) would be arbitrary. In simple terms, the ends cannot justify the means.

Faced with these facts, Government would have to be particularly ignorant, even by its own standards, to pursue plain packaging legislation when it is guaranteed to fail on constitutional grounds. Nevertheless, South African plain packaging legislation in the near future will not come as a surprise.

Opponents of Government regulation often refer to the “nanny State” as part of the argument against State interference in private consumption. In the South African context such nanny legislation (that seek to chastise its citizens for its behaviour, ostensibly for their own benefit) must be tested against the Constitution, which requires a weighing of the individual’s rights against those of the public at large. However, in the case of plain packaging it has now been established that the proclaimed public interest (namely health) is not being served. One must therefore ask, if Government maintains its current agenda, how will it be justified in destroying some of the world’s most established trade marks?

South Africa is by no means a nanny State, but perhaps it requires a nanny populace to whip its legislature into shape. Difficult as it may be for Government to swallow, plain packaging legislation is nonsense. Hopefully now that it has been dusted with the Australian experience, it will be a sweeter pill to swallow.

Cobus Jooste