SA should learn from Australian tobacco policy failures, and stick to education rather than over-regulation

It is now beyond clear that SA’s continued ban on tobacco-related products has been a total disaster in the midst of the Covid-19 pandemic. The government loses R35m in tax revenue every day, and South Africans continue to smoke as before.

What comes after the lockdown ends? Research from the Australian government suggests that there should be a relaxation of tobacco policy given that country’s own failures. SA should take note.

Recent evidence from Australia illustrates the folly of trying to reduce demand through regulation, not that we necessarily need to look beyond the lived experiences of our friends and relatives here at home. On July 16, the Australian Institute of Health and Welfare published its 2019 National Drug Strategy Household Survey (NDSHS).

The survey asked more than 22,000 Australians about the performance of their government’s health policies, which includes tobacco control. Australia introduced plain packaging for tobacco products in December 2012, and is the only market for which longer-term data exists on policy effectiveness.

NDSHSs were conducted before and after this policy became operative, giving an indication as to whether it has succeeded.

Plain packaging was introduced to make tobacco products less appealing and thus lead to lower demand. But the NDSHS findings are not surprising and confirm what economists have known for decades: regulation and, at worst prohibition, does not lead to lower demand.

The percentage of daily smokers in Australia up to the introduction of plain packaging had been declining at a steady rate of 0.46% a year for more than two decades. After 2012, the decline slowed — not accelerated — to just 0.26% a year.

Before plain packaging, three in 10 Australians had no interest in giving up smoking — and that number did not decline afterwards. This is not to say that plain packaging was the cause of an increased demand, but rather that it certainly did not reduce demand.

Author’s analysis

Where plain packaging and other regulations can be blamed for an increased demand is with illegal loose-leaf tobacco, consumed either in roll-your-own form or inserted into empty cigarette tubes. The proportion of Australian smokers consuming these products increased by 37% after plain packaging was introduced, meaning that the 10.5% of illicit tobacco users in 2010 became 14.4% in 2019.

A May 2020 KPMG study agrees, but puts the latest numbers far higher for overall consumption of illicit tobacco (which includes unbranded loose tobacco, along with contraband and counterfeit product) — there has been an 80% increase in demand, from 11.5% in 2012 to 20.7% in 2019.

The Covid-19 lockdown regulations in SA have similarly caused the demand for illicit tobacco to skyrocket. Indeed, the only reason smokers aren’t rioting in the streets of SA is because they have managed to source cigarettes from the “black market”, which is short for “the economy doesn’t care about your politics”.

Prohibition cannot work: demand will always be supplied. Governments should find innovative ways of decreasing demand, such as education and information about alternatives to smoking, such as vaping.

The Covid-19 ban on tobacco product sales is, however, the more pressing problem … and has likely led to the smoking of far more hazardous cigarettes

The data shows that plain packaging is not helping Australian smokers quit. It might even be contributing to growth in the illicit tobacco trade. The law of unintended consequences, as with all policy, makes its presence known. It would therefore be unwise, reckless even, for SA to introduce plain packaging as contemplated in the Control of Tobacco Products and Electronic Delivery Systems Bill of 2018.

As I pointed out at the time of the bill’s public participation process, the impact assessment undertaken by the government was woefully inadequate. That it did not factor in the poor performance of the plain packaging experience in Australia, goes to show that the bill was ill-considered.

President Cyril Ramaphosa should send the bill back to parliament, where any plain packaging provisions should be removed.

Moreover, the bill’s anticipated over-regulation of vaping products should also be revised, as vaping might prove to be one of the more effective means of getting people to quit smoking. If there is to be regulation, it must be proportionate and reflect the simple fact that vaping isn’t smoking, and they should not be treated in the same way. Public Health England argues that it is at least 95% less harmful than cigarette smoking, and e-cigarettes have also been found much better for quitting smoking, compared with nicotine replacement treatment.

The Covid-19 ban on tobacco product sales is, however, the more pressing problem. It has cost government more than R1bn a month in revenue since March, and has likely led to the smoking of far more hazardous cigarettes than would be available on the legal market. It is not government’s place, nor is it evidently within its expertise, to dictate lifestyle choices, even and perhaps especially during this particular pandemic.

Even the National Institute for Communicable Diseases has admitted that there is little to no evidence linking smoking to severe Covid-19 cases.

If SA does not wish to learn from history, which teaches the lesson that prohibition has never and can never work, then perhaps we can learn a lesson from experiences in other countries right now. The Australian experiment with plain packaging shows that at best it has no influence on the prevalence of smoking, and at worst might lead to an increased demand for illicit tobacco products, already a major problem in SA.

If our government insists on being involved in the lifestyle choices of citizens, it must stick to education and information, and leave the disastrous ideas of over-regulation and prohibition in the dustbin of history.

Originally published here.

The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

Al Capone is one of the most infamous criminals in history. Countless books and movies have elevated his name to a level that even during his lifetime, few imagined possible. His crime-syndicate, the “Chicago Outfit” fought bloody gang wars over the production and supply of illegal alcohol. The United States was in the midst of the era of alcohol prohibition, and supplying people with black market products was a lucrative business. Through a lack of health inspection, thousands died from bootlegged liquor, and the policy had fuelled the rise of some the worst mobster imaginable. The U.S had to change its constitution again to end the prohibition of alcohol.

The South African government was undoubtedly worried about the same thing when it gradually eased rules and regulations for the sale of alcohol during this pandemic. That said, the same logic is not being applied for tobacco products. Cigarettes and e-cigarettes remain illegal, leaving a large part of the population with no choice but to consult the black market, particularly since the ban came unannounced at the end of March. This policy decision has caused international attention — the BBC writes: “What was perfectly legal two months ago has turned thousands of people into potential criminals.”

Black market cigarettes don’t operate according to quality control and have been shown to poison their users in a literal sense.  

The criminal justice implications of enforcing such a stringent ban are fatal. Black market cigarette dealers have been shown to contribute to the rise of international terrorism. A 2015 report by the French Union for Industrial Production points to the fact that 20 percent of illicit cigarette sales finance international terrorism (according to the French Centre d’analyse du terrorisme in 2015). This number has been filtered out of a total number of 75 international prosecutions involving large-scale counterfeiting of tobacco products. Does feeding international crime with willing customers serve the interests of South Africa?

The government is right in pointing out that smoking isn’t a healthy habit. Even though the effect of tobacco during the COVID-19 pandemic is scientifically disputed, it makes intuitive sense for consumers to try and reduce their tobacco consumption during an international health crisis involving a disease that causes acute respiratory problems. However, a complete ban on cigarettes is set to make things much worse. Black market cigarettes don’t operate according to quality control and have been shown to poison their users in a literal sense.

As a consumer and analyst from Luxembourg, I am not fond of all the public policy responses of my government.

Counterfeit cigarettes use three times more cadmium—which can cause renal failure or injuries to the liver—and arsenic—which has been proven to cause lung cancer. These cigarettes have also been found to contain hair, cement, and mouse faeces. UK-estimates released by the Local Government Association has put the level of cadmium in counterfeit cigarettes at around 500 percent higher than ordinary brands, making them considerably more dangerous to consume.

As a consumer and analyst from Luxembourg, I am not fond of all the public policy responses of my government. And yet, despite having a more substantial rate of COVID-19 infections than South Africa, the Luxembourgish government has not chosen to reduce the availability of cigarettes or vaping products. This shows that the South African response is not measured or thought through 

Consumers will be hurt by the decision to continue a blatant ban on tobacco products and harm-reducing products such as e-cigarettes. It is now time for the government to change course.

Originally published here.

The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org