The global tobacco industry sees the plain packaging move as arguably the greatest single threat it has ever faced, and is spending millions to say that — really, honestly — plain packs just won’t work and will cause chaos throughout the economy.

Plain packaging is a big threat to Big Tobacco because profitability in the tobacco industry today rests largely on high-priced premium brands.

Simon Chapman says at Croakey

These are able to attract higher retail prices purely on the strength of branding and pack image. If all packs will look the same, many smokers will wonder why they should shell out far more for a pack that looks the same as every other brand except for brand name and that internal tobacco industry research shows cannot be distinguished from cheaper brands in blinded smoking experiments.

The illusion that premium brands are “better” will evaporate, and much profitability with it.

I recall that the Institute of Public Affairs has come out defending Big Tobacco. The IPA have run the intellectual property argument, namely Big Tobacco has a right to use their trade marks under the trade-related aspect of intellectual property rights (TRIPS) agreement.

The tobacco industry argues that the plain packaging measures contravene the provisions of TRIPS.

"The Liberal's election strategy of saying no, stoking the fear in the electorate, and blaming the carbon tax for everything to do with the cost of living has been effective."

Abbott is in campaign mode. Every day he attacks Gillard and her government for being hopeless, out of control, and out of their depth. The attacks are hard and relentless. They are reinforced by the shock jocks and the News Ltd media.

Gillard and her government become ever more unpopular. The attack tactic is working a treat for the Liberals.

What disheartens me is that so many "average" Australians will go along with Abbott... no matter how extreme his position or how illogical his argument. They will do this based entirely on their ignorance and fear. And the media continues to fuel the misinformation.

Often these people are agreeing with a bunch of stuff that is probably AGAINST their self-interest, just because Abbott may have touched on one point they feel VERY passionate about.

mars08,
its all the Greens fault according to Paul Kelly in The Australian. He says:

Let's tell the truth about the past half decade. The green agenda has corrupted Labor values. It has seen Labor governments embrace fiscal irresponsibility, regressive income re-distribution and treat their supporters as too dumb to understand they were being played for mugs. For too long the idea that any green scheme was a good scheme was sanctified as a compliant media cheered such initiatives.

And further:

Repentance will take many forms and have multiple consequences. The electoral backlash from defective pro-green policies and the arrogance towards ordinary voters embedded in such schemes will haunt Labor, state and federal, for many years. Perhaps some tolerance for mistakes should be extended. The bigger point, however, is that Labor's culture abandoned fiscal discipline and social equity for what became the climate change cargo cult.

So Labor face an electorate that is now hostile and suspicious to almost all such climate change schemes that involve higher prices.

This hostility is a recognition by the public that they have been conned by state and federal governments pushing green schemes that lifted power bills in policies that meant marginal environmental gain at ludicrous abatement cost.

Oh they were conned alright!

The were conned into believing that they could live a relentlessly "relaxed and comfortable" lifestyle and...
miraculously... some other miserable bugger would always pick up the tab!

Further to Peter's comment about the IPA above:

Below is a link to a recent Radio National transcript on the subject of plain packaging.
Included are comments by the Inst of Public Affairs.

The IPA is hopelessly compromised when it comes to tobacco [and other issues] and what it says simply cannot be trusted.

Sorry about the length that follows but it is rare for a public commentator to be so blatantly ex[psed that I think it deserves some detail.

From the transcript:

"For example, Tim Wilson, Director of the Intellectual Property and Free Trade Unit at the Institute of Public Affairs, or the IPA. He's been warning that plain packaging could cost billions a year in compensation to big tobacco......
Tim Wilson says he's recently obtained Freedom of Information documents proving that the government agency Intellectual Property Australia, has advice that plain packaging isn't legally sound.
Those FOIs are also being used by the Chairman and CEO of Philip Morris International, who's mentioned them in a recent investors' conference in New York........
Tim Wilson: "Well the documents tell a surprisingly large number of things. Firstly, that there are people within Intellectual Property Australia who believe that plain packaging would violate WTO obligations, and Intellectual Property Australia wasn't consulted, that there may be breaches with our bilateral trade agreements, that the evidence or that robust legal advice the government has, would appear to be very weak, according to internal discussions, and that they believe that it will not necessarily cover the government."

Background Briefing has shown a transcript of this explanation to Intellectual Property Australia, and we received this comment in response. It reads in part:

Reader: IP Australia can confirm that the claims made by the Institute of Public Affairs are incorrect and misleading.

IP Australia's advice in documents released under the FOI Act acknowledged that tobacco companies would see plain packaging as a restraint on the use of their trade marks. The advice indicated that they may try to challenge the legislation implementing the policy. The advice did not suggest that a successful challenge would be made or that the tobacco industry would be entitled to compensation."

There is more, I recommend reading the transcript.

http://www.abc.net.au/rn/backgroundbriefing/stories/2011/3139515.htm

Which, of course, raises the question why does the media, anybody for that matter, give the IPA credibility on this or any other issue?

If cigarettes were half the price or less people who smoke now would most likely smoke more. This includes kids. People who had given up or cut down dramatically because of price would be more likely to restart. The illegal market is currently 16% of use according to the British Tobacco mouthpiece on ABC yesterday. So when plain packaging is introduced and it follows that more illegal cigarettes flood the market causing dramatically reduced prices as is expected by the industry we will see increased smoking and reduced tax collection. This is a backwards step to all the hard work that has been done over the years to reduce smoking especially the uptake of youngsters.
So after a year or so the government of the day will say hey maybe this wasnt such a good idea we better change the packaging back and have a major crackdown on illegal smokes after much lobbying from the industry.
So in 2 years time though profits over the discounting period will be down the tobacco industry will have increased their smoker base which is what they want. People dying is just collateral damage to them.

Les,

(1) is the British Tobacco claim that 16% of all tobacco sales are illegal a credible figure?

(2) is it the case that more illegal cigarettes will flood the market causing dramatically reduced prices as claimed by the industry?

"is the British Tobacco claim that 16% of all tobacco sales are illegal a credible figure?"

Simon Chapman at Croakey contests the claims by British Tobacco. He says

the 2007 National Drug Strategy Household Survey (amazingly, not compared or even referenced by PWC), which found that while 8.7% of adult Australians had ever smoked unbranded, only 0.2% of the population (about 33,000 people) used it more than half the time.
Smuggled tobacco is a major issue in nations with high corruption indexes and open borders. It has never been a major problem in Australia.

The tobacco industry has shifted its main attack on tax rises from being a concerned friend to the poor (“prices rises hurt the poor .. so keep the price low!”) to the idea that they generate significant black markets.

Its not just the IPA running spin for the tobacco industry in its campaign to defend the branding of cigarette packaging. The Australian is doing likewise.

The paper’s Legal affairs editor Chris Merritt in his article, In the care of a nanny state, runs the libertarian line that plain cigarette packaging is nothing less than a demonstration of the growth of the nanny state in Australia, and an example of social engineering.

"If cigarettes were half the price or less..."

That's a really big IF, Les.

Could the cigarette companies produce such a cheap product and still make a profit in Australia?

Anyway, I think that the last few days have clearly shown how ruthless and amoral the industry really is. It's been a PR debacle for the industry.

The industry profits from getting people addicted to harming themselves and the government takes a share.
Yes and even the tobacco growers are scum.

Les writes:
"So when plain packaging is introduced and it follows that more illegal cigarettes flood the market causing dramatically reduced prices as is expected by the industry we will see increased smoking and reduced tax collection."

Australian Customs and the Australian Federal Police would just wave the illegal cigarettes through?

Will there be dramatically reduced prices? Big Tobacco says that if the government introduces plain packaging, they'll be forced to slash the price of cigarettes and Asian triads will sell illegal cigarettes to our children.

As Richard Denniss, the head of The Australia Institute,observed the Australian Government can respond by putting a floor under cigarette prices and matching any price fall below this point with excise increases.

Most likely the winners will be those that sell cigarette packet covers in jazzy colours like the phone covers.
Perhaps the shops will give away a free cover with every carton. Covers supplied by guess who. LOL

Big Tobacco claims that the plain packaging legislation would lead to more people smoking. Big Tobacco is opposed to more people smoking.

That's only a rationale. They are opposed to what they see as the destruction of their brands by the forthcoming legislation. Their fight is to retain their brand.

As expected The Australian comes out in opposition to the plain packaging of cigarettes. The editorial says:

Perhaps Labor's senior ranks have embraced some new age morality that compels them to tell the rest of us how to live our lives. ...But as with other harmful but legal behaviour, responsibility rests with individuals. It is beside the point whether market research supports or contradicts the possibility that the world's first plain packaging would cut smoking further. In a market economy, the only goods and services that should not be marketed are those that are banned.

A concern for public health is dismissed as moral posturing