Tobacco Regulation in Australia

On December 1^st, Australia’s new “plain-packaging law” will come into effect, dictating that all cigarettes be sold in identical “drab dark brown” packs with brand names set in standardized type. This regulation is receiving strong opposition from tobacco companies such as British American Tobacco, since packaging is seen as “the last major frontier” in the attack on tobacco marketing.

“It ought to be a disaster for big tobacco… The pack itself serves as a badge of a smoker’s taste and means, displayed and pocketed 20 or 30 times a day. Lighter colors hint at relative healthiness…”

While the World Health Organization cites that “blanket advertising,” may reduce smoking by up to 7%, the Economist article “Look What They’ve Done to My Brands” points out that the effects of this new regulation may not be all that simple. At first glance, it may seem to be the type of regulation aimed at the “protection and benefit of the public at large,” the first view of regulation referenced in Stigler’s article, which can harm industries producing unhealthy products. However, the Economist piece states that “faced with rows of identical boxes Aussies will ask for their favorites by name. New brands will find it hard to break in.” Thus, perhaps BAT and other well established tobacco companies in Australia should welcome this new form of regulation, as it may actually serve as a form of entry control in the industry.