Read The Times Australia

Daily Bulletin

How the tobacco industry is gaming Australian health regulations

  • Written by: Steven Greenland, Associate professor, Swinburne University of Technology

Australia’s tough tobacco regulations are acting as a catalyst for the industry to develop sophisticated marketing practices. These companies are gaming the system by anticipating regulatory impact and then using unregulated marketing elements to overcome it.

Australia has been a guiding light for countries looking to improve public health through the effective regulation of tobacco, which remains the world’s biggest cause of preventable illness and death, and still kills around 15,000 Australians annually.

December 2012 saw the implementation of Australia’s innovative plain packaging legislation, this was followed by four 12.5% annual tobacco tax excise increases. As a result the number of Australian smokers has fallen to a record low.

However the tobacco industry has used several strategies, including price reduction, brand differentiation and promoting the idea of healthier cigarettes, to undermine Australia’s new regulatory environment.

image Plain packaging was introduced in 2012 to much fanfare, but tobacco companies are making serious efforts to alleviate the effects of plain packaging on their bottom line. Lukas Coch/AAP

Pricing for packets

To offset price hikes manufacturers have expanded lower priced product ranges, with new ultra low priced brands. One example of this is the British American Tobacco Australia’s (BATA) Just Smokes, which sells for around 70% of the premium brand prices. BATA has also shifted Rothmans, previously a premium brand, into the economy segment by cutting its price by more than 30%.

Another pricing initiative is twin pack promotion. Most consumers recognise that progressively larger packs offer progressively lower unit prices - a lower cost per single item or single pack.

This used to be true for tobacco, with the largest cartons (usually with 200 cigarettes) offering best value. However, since 2012 discounted twin packs represent best value.

A supermarket twin pack, per cigarette price, is up to 10% cheaper than single packs - effectively discouraging single pack purchases. Australia’s leading brand Winfield twin pack, per cigarette price, is equal to or below that of larger cartons.

Regulatory price increases are financial deterrents to smoking. The low price branding and discounting strategies in Australia are clear attempts to get around these, and reduce smokers’ financial motivation to quit or cut down.

Heavily discounted twin packs also teach smokers, through financial reward and penalty, to buy twin rather than single packs. This is of particular concern since research shows that larger purchases trigger higher consumption.

In 2014 the industry claimed tobacco consumption had actually increased after plain packaging. While this was disproved, it suggests big tobacco anticipated increased consumption as smokers switched to twin pack purchase behaviour.

New tobacco products and promotions

Plain packaging was expected to restrict tobacco brands. However, after 2012 manufacturers introduced numerous new products, and brand ranges actually expanded.

For example, Australia’s leading brand Winfield supported more than 20 brand variants in 2015-2016 compared to just 12 in 2012-2013. Brand differentiation is a proven marketing approach for generating greater sales, with each variant targeting a specific consumer market segment.

Since plain packaging was introduced, tobacco companies have varied the names of brands as well. Names have evolved to include the information previously covered by packaging, such as colour and new product features. For example, Dunhill Infinite is now Dunhill Infinite White + Taste Flow Filter.

Today around 80% of Australia’s leading brands’ variant names include a colour, compared to less than half before plain packaging. Tobacco companies are also using colours to mislead consumers that certain product ranges are “healthier” options.

A universal colour code has been promoted by the industry in which smokers interpret lighter colours (white, silver, gold, yellow and blue) as being less harmful, and darker colours (red and black) as more harmful. Before plain packaging colour hues were a pack design component, now the myth of healthier tobacco options is perpetuated by colour names. This is disturbing from a public health perspective as it represents industry efforts to lessen smokers’ health motivations for quitting.

The effects of clever marketing

Australia’s tobacco regulations have significantly reduced smoking. However, their impact would be greater without unscrupulous industry initiatives to overcome and thwart them.

Industry response to plain packaging and excise increases have not been simple marketing efforts to increase sales, but illustrate cynical attempts to reduce financial and health motivations for quitting, and to encourage smokers to smoke more. Australian regulators, and those in other countries, should therefore consider further regulation.

Research suggests that future effective controls might include:

  • Introducing a standard fixed per stick price for all cigarettes - preventing differentiation by price and cheaper brand options
  • Prohibiting price variation by pack size - preventing volume discounting or twin pack promotion that encourage smokers to make larger purchases and smoke more
  • Restricting pack size to a maximum of 10 or 20 cigarettes to limit increased consumption associated with larger pack sizes
  • Banning colour variant names - removing colour-health connotations
  • Restricting brand variant ranges, for example to one variant or representation per brand, to limit the way tobacco companies use differentiation to increase sales.

The tobacco industry is committed to gaming regulations, like plain packaging and tax excise increases, and developing approaches to undermine their impact. However, the Australian government is equally committed to reducing the national adult daily smoking rate to 10% by 2018. The additional tobacco controls outlined above should help the government achieve this.

Authors: Steven Greenland, Associate professor, Swinburne University of Technology

Read more http://theconversation.com/how-the-tobacco-industry-is-gaming-australian-health-regulations-67156

Business News

Reducing Sales Friction Through Centralized Content Delivery

Sales friction appears whenever buyers or sales teams face unnecessary obstacles in the buying journey. It can happen when information is hard to find, when messaging feels inconsistent, when product ...

Daily Bulletin - avatar Daily Bulletin

Why Choosing the Right Bollard Supplier Matters for Australian Businesses and Public Spaces

From busy CBD streetscapes to sprawling warehouse loading docks, bollards have become one of the most essential safety and security fixtures across Australia. Whether protecting pedestrians from veh...

Daily Bulletin - avatar Daily Bulletin

Why Modular Content Is Transforming Modern Marketing Teams

Modern marketing teams are expected to produce more content than ever before. They need to support websites, landing pages, email campaigns, social channels, product pages, sales enablement material...

Daily Bulletin - avatar Daily Bulletin

Everything You Need to Know About Getting Support from Optus

Whether you've been an Optus customer for years or you've just switched over, at some point you'll probably need to contact their support team. Maybe your bill looks different from what you expected. ...

Daily Bulletin - avatar Daily Bulletin

The Marketing Strategy That’s Quietly Draining Sydney Business Owners’ Bank Accounts

Sydney businesses are investing more in digital marketing than ever before. The intention is clear. More visibility should mean more leads, more customers, and steady growth. However, many business ...

Daily Bulletin - avatar Daily Bulletin

Why Mining Hose Solutions Are Essential For High-Performance Industrial Operations

In environments where the ground itself is constantly shifting, breaking, and being reshaped, every component must be built to endure. Mining operations are among the most demanding in the industria...

Daily Bulletin - avatar Daily Bulletin

The Reason Talented Teams Underperform

If you’re in business, you might have seen it before. A team of capable and smart people just suddenly slows down, and things start spiraling out of control. On paper, everything looks perfect, but ...

Daily Bulletin - avatar Daily Bulletin

Why More Aussie Tradies Are Moving Away From Paid Ads

Across Australia, a lot of tradies are busy. There’s no shortage of demand in industries like plumbing, electrical, landscaping, and building. But being busy doesn’t always mean running a smooth or...

Daily Bulletin - avatar Daily Bulletin

Why Careers In The Defence Industry Are Growing Rapidly

The defence sector has evolved far beyond traditional roles, opening doors to a wide range of opportunities across technology, engineering, intelligence, and operations. This is where defense industry...

Daily Bulletin - avatar Daily Bulletin

The Daily Magazine

Australia’s Best Walking Trails and the Shoes You Need to Tackle Them

Australia is not short on spectacular walks. You can follow ocean cliffs in Victoria, cross ancien...

Why Pre-Purchase Building Inspections Are Essential Before Buying a Home in Australia

source Have you ever walked through an open home and started picturing your furniture, family d...

5 Signs Your Car Needs Immediate Attention Before It Breaks Down

Car problems rarely appear without warning. In most cases, your vehicle gives clear signals before...

Ensuring Safety and Efficiency with Professional Electrical Solutions

For businesses in Newcastle, a safe and fully functioning workplace remains a key part of day-to-d...

Choosing The Right Bin Hire Solution For Hassle-Free Waste Management

When it comes to managing waste efficiently, finding the right solution can save both time and eff...

Why Cleanliness Is Critical In Childcare Environments

Children explore the world with curiosity, often touching surfaces, sharing toys, and interacting ...

What to Look for in a Reliable Australian Engineering Partner

Choosing an engineering partner is rarely just about technical capability. Most businesses can fin...

How to Choose a Funeral Home That Supports Families with Care

Choosing a funeral home is rarely something families do under ideal circumstances. It often happen...

Why Premium Coffee Matters in Modern Hospitality Venues

In hospitality, details shape perception long before a guest consciously evaluates them.  Lightin...