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UK STANDARDISED PACKAGING CONSULTATION RESPONSE OF BRITISH AMERICAN TOBACCO UK LIMITED 08 August 2012 Table of Contents Page ABOUT BRITISH AMERICAN TOBACCO UK LIMITED .............................................................. 1 EXECUTIVE SUMMARY ............................................................................................................2 1. QUESTION 1 ................................................................................................................. 10 1.1 Plain Packaging would not work and would have serious unintended consequences .................................................................................................... 10 1.2 Smoking prevalence is reducing without the need for risky additional measures ........................................................................................................... 11 1.3 The FCTC does not require Plain Packaging ..................................................... 11 1.4 Effective alternative measures ........................................................................... 12 2. QUESTION 2 ................................................................................................................. 15 3. QUESTION 3 ................................................................................................................. 16 3.1 The studies relied on in the PHRC Review are flawed and irrelevant ................. 17 3.2 Plain Packaging would not discourage young people from taking up smoking ... 20 3.3 Plain Packaging would not increase cessation rates or discourage relapse ....... 23 3.4 Plain Packaging would not reduce people’s exposure to smoke from tobacco products ............................................................................................................. 26 3.5 It is not possible to assess the potential contribution of Plain Packaging “over and above existing measures” until the retail display ban is fully implemented ... 26 4. QUESTION 4 ................................................................................................................. 27 4.1 Plain Packaging would not reduce the appeal of using tobacco products ........... 27 4.2 Plain Packaging would not increase the effectiveness of health warnings on the packaging of tobacco products ..................................................................... 27 4.3 Consumers are not misled about the harmful effects of smoking ....................... 30 4.4 Plain Packaging would not materially affect the tobacco-related attitudes, beliefs, intentions and, most importantly, behaviours of children and young people ................................................................................................................ 31 5. QUESTION 5 ................................................................................................................. 32 5.1 The overall impact of Plain Packaging on current market dynamics ................... 32 5.2 Prices would fall ................................................................................................. 33 5.3 The illicit market would expand .......................................................................... 35 5.4 Plain Packaging would impede market entry ...................................................... 35 i Table of Contents (continued) Page 5.5 International trade and investment implications .................................................. 35 6. QUESTION 6 ................................................................................................................. 38 6.1 Summary of key legal obstacles ......................................................................... 38 6.2 The harmonised regime of trade mark protection ............................................... 39 6.3 The protection of other IPRs .............................................................................. 41 6.4 The rights to property and commercial communication ...................................... 42 6.5 Trade implications within the EU and internationally .......................................... 43 6.6 Bilateral Investment Treaties .............................................................................. 44 7. QUESTION 7 ................................................................................................................. 46 7.1 Plain Packaging would expropriate valuable intellectual property ....................... 46 7.2 Other impacts of Plain Packaging on industry participants ................................. 47 8. QUESTION 8 ................................................................................................................. 50 8.1 A loss of legitimate sales to the illicit trade ......................................................... 50 8.2 A detrimental impact on the efficiency of day-to-day operations ......................... 51 8.3 Increased security concerns .............................................................................. 52 8.4 Disproportionate impact on small businesses .................................................... 52 8.5 Pressure on profit margins ................................................................................. 52 8.6 Burdensome over-regulation .............................................................................. 53 9. QUESTION 9 ................................................................................................................. 54 9.1 The nature of the illicit trade in cigarettes in the UK ........................................... 54 9.2 Plain Packaging would exacerbate the illicit trade problem ................................ 56 9.3 Negative consequences ..................................................................................... 59 9.4 Lack of evidence ................................................................................................ 61 10. QUESTION 10 ............................................................................................................... 63 11. QUESTION 11 ............................................................................................................... 64 11.1 Impermissible precedent set for other industries ................................................ 64 12. QUESTION 12 ............................................................................................................... 66 13. QUESTION 13 ............................................................................................................... 67 ii Table of Contents (continued) Page 13.1 The Equality Impact Assessment does not account for all the impacts of Plain Packaging or undertake an assessment of the impacts on all at risk groups ...... 67 14. QUESTION 14 ............................................................................................................... 69 14.1 Failure to consider alternative policy options ...................................................... 69 14.2 Lack of sensitivity analysis ................................................................................. 70 14.3 Lack of evidence on key issues .......................................................................... 71 14.4 Bias in favour of implementation of the Plain Packaging policy .......................... 72 14.5 Proposal to quantify the unknown impact of Plain Packaging is flawed and unreliable ........................................................................................................... 73 RESPONSES TO QUESTIONS IN THE CONSULTATION APPENDIX B ................................. 75 REPORT OF DR. JONATHAN KLICK APPENDIX A REPORT OF MR. STEPHEN GIBSON APPENDIX B iii ABOUT BRITISH AMERICAN TOBACCO UK LIMITED British American Tobacco UK Limited is a member of the British American Tobacco group of companies and is responsible for the importation, distribution and sale of tobacco products in the UK (principally cigarettes, but also hand-rolling tobacco (HRT)). British American Tobacco UK Limited has an approximate 8% share of the UK market in cigarettes, with brands such as LUCKY STRIKE, DUNHILL, PALL MALL, ROTHMANS, CONSULATE, CRAVEN A, PETER STUYVESANT, PICCADILLY, ROYALS, ST MORITZ and VOGUE. British American Tobacco UK Limited also has a share of over 13% of the UK Market in HRT with the brands CUTTERS CHOICE, PALL MALL and SAMSON. ABBREVIATIONS British American Tobacco, BAT or We – British American Tobacco UK Limited. Consultation – the Department of Health Consultation on standardised packaging of tobacco products, April 2012. Equality Impact Assessment – the Department of Health Consultation on standardised packaging of tobacco products, Equality Impact Assessment, April 2012. FCTC – the World Health Organisation Framework Convention on Tobacco Control Treaty. Impact Assessment – the Department of Health Impact Assessment on standardised packaging of tobacco products, April 2012. PHRC Review – the Department of Health commissioned review of the evidence on plain packaging undertaken by the Public Health Research Consortium (PHRC). Moodie, C., et al., “Plain Tobacco Packaging: A Systematic Review” PHRC (2012). Plain Packaging – standardised packaging as described in the Consultation. Response – this document. WHO – the World Health Organisation. WTO – the World Trade Organisation. RESPONSE OF BRITISH AMERICAN TOBACCO UK LIMITED Page 1 EXECUTIVE SUMMARY British American Tobacco is strongly opposed to Plain Packaging because: 1. Plain Packaging would not be effective in reducing smoking prevalence since tobacco packaging
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