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Memorandum by ITPAC (H 04)
THE IMPORTED TOBACCO PRODUCTS ADVISORY COUNCIL
1. WHAT IS ITPAC?
ITPAC is a trade association
that represents the interests of 12 companies, which import tobacco products
for distribution in the
2. ITPAC's STANCE ON UNDER-AGE SMOKING
ITPAC supports the Government's efforts to tackle smoking by children and young people. However ITPAC does not consider that the evidence exists to support the view that a display ban would reduce the likelihood of young people starting to smoke.
ITPAC believes that better enforcement of existing legislation, including the recent regulations to raise the legal age of purchase to 18, combined with new regulations to outlaw adults buying tobacco products for children, and increased education campaigns properly pitched at the target audience, would have a greater impact on this problem than a display ban.
3. HEALTH BILL
Given the nature of the businesses it represents, ITPAC is strongly opposed to any legislation which restricts retailers from displaying tobacco products. Consequently ITPAC would like to see Clause 21 (formerly Clause 19) removed from the Health Bill.
The main reasons for this position are:
- the lack of credible evidence that display bans have had an impact on youth smoking - the effect on small retail businesses - the effect on small distributive businesses - the unintended stimulus to the sale of illicit goods
4. SPECIFIC REASONS
LACK OF CREDIBLE EVIDENCE
There is no credible evidence that the tobacco display bans enforced in Iceland and in Canada have had an impact on youth smoking initiation or prevalence; indeed the New Zealand Government has recently confirmed that it will not introduce a ban due to the fact that '... there is no international evidence that it actually works, and it's hugely expensive to do it'.
SMALL RETAIL BUSINESSES
Small, usually family-owned, retail businesses struggle to compete with the larger retailers and are already highly regulated. Tobacco is a major driver of footfall and cash turnover for these small shops and they are particularly reliant on displays to show consumers the range of products they have in stock and their prices. Without displays, larger shops would be at a significant competitive advantage because consumers will reasonably expect to find all brands and products on sale there at lower prices. Also the impact of the cost of refitting a shop to comply with a display ban would be proportionately much higher for a small, independent business than a large chain. Given the existing and increasing pressures on this sector, ITPAC considers that this additional, major, regulatory imposition would be unjust and unreasonable.
SMALL DISTRIBUTIVE BUSINESSES
ITPAC is extremely concerned that, if a display ban were to be introduced, the small distributive businesses for specialist tobacco products, which form most of its membership, would be severely and disproportionately affected as a direct consequence of the ban's impact on the small retailers which are their main customers.
ILLICIT GOODS
ITPAC believes that an unintended consequence of a display ban will be to exacerbate the problem of illicit trade by enabling rogue traders to sell illegal product more comfortably without fear of detection. Retailers currently access product from an open display which makes it easy for customers (and investigators) to identify whether they are getting genuine duty paid product. If all tobacco products are removed from view there would be no immediate visible distinction between legal duty paid and illegal product.
5. SPECIALIST TOBACCONISTS
Specialist Tobacconists, as defined in the Bill, account for an important proportion of the business conducted by ITPAC's smaller members. Although the Government has indicated that an exemption will be granted to Specialist Tobacconists in Regulations, no such exemption is provided for on the face of the Health Bill. Furthermore, the point of sale advertising exemption currently enjoyed by Specialist Tobacconists under Section 6 of the Tobacco Advertising and Promotion Act 2002 has been withdrawn. This leaves not only these businesses, but also the ITPAC members who supply them in an uncertain and very worrying position.
6. SPECIALIST TOBACCO PRODUCTS
Specialist tobacco products such as cigars and pipe tobaccos appeal
mostly to over 35 year olds. Data taken
from the 2008 TNS Omnibus Survey indicate that in the
Shops seeking to build a business in these products commonly offer between 50 and 100 different types of cigars or pipe tobaccos. Consequently the role played by displays in helping their mature, adult customers to make a choice is essential to the operation of their businesses, in exactly the same way that a specialist wine and spirit shop displays a wide range of wines, liqueurs and aged Scotch Whiskies.
By no means all such shops qualify under the law as Specialist Tobacconists, and so if their ability to display specialist tobacco products is prohibited, both their individual businesses, and ITPAC's member companies which supply them, would suffer greatly. In fact ITPAC's smaller members estimate that they would lose 1/3rd of their current turnover even if Specialist Tobacconists were exempted from the ban; this would compound the loss of between 20% and 30% of their turnover following the ban on smoking in public places in 2007.
7. CONCLUSION
ITPAC's
members are particularly reliant on smaller tobacco retailers, including
Specialist Tobacconists. We believe a ban on displays would drive tobacco from
many small retail outlets throughout the
ITPAC is particularly concerned that the evidence employed to support measures that would have such a radical impact on its members' legitimate businesses, is questionable.
June 2009 |