Memorandum submitted by NFRN (H 13)

 

1. The National Federation of Retail Newsagents represents 17,000 independent shops in the United Kingdom.

 

2. This report has been prepared for members of the Committee on the Health Bill 2008 and sets out the views of our members on the proposed tobacco displays ban:

 

3. A tobacco displays ban will severely damage our members' shops in the following ways:

 

a. It will cost each of our members over £1000 to implement. While the precise amount will vary from shop to shop, reliable solutions will cost at least £1000. The Department of Health have said that low cost solutions such as curtains will be permitted. However, such solutions would be unacceptable to most of our members because they will make the shop look very unprofessional and will expose the retailer to risk of fines and penalties. Retailers will be expected to open and close the curtain for every tobacco transaction. This is impractical. During busy periods in particular, it is likely that the curtain maybe be left open accidentally for too long and then of course penalties will be imposed.

b. Apart from the recession, the single biggest issue facing retailers today is business crime. Theft and assault are common occurrences for retailers. We need to be constantly watchful of our shops and retailers teach their staff that if money is dropped on the floor, they should not stoop to pick it up while there are people in the shop. Under a display ban, at every single tobacco transaction (hundreds per day), retailers will have to search for the requested product and retrieve it from its hiding place. This will obviously mean that we will be distracted while doing so. We cannot monitor the shop floor and search for hidden products at the same time. This will present literally hundreds of opportunities for thieves and violent criminals every single day. Currently, we need only glance at the tobacco gantry to find a requested product.

c. The ban will place us at a competitive disadvantage to the multiples. Today, a customer need only scan our gantry to determine whether their favoured product is in stock. Under a display ban, they will first need to queue to checkout. Rather than queue for a product that might not even be available they will instead go to multiples who they presume will stock a fuller range of tobacco products.

d. The Department of Health have said that since small retailers have until 2013 before the display ban comes in, and that they would be changing their gantries anyway because they typically change their gantries every 4 years. While this might be true for large shops who get lots of support from tobacco companies, it is not true of small shops.

e. If the government bans display, tobacco companies will compete on price more aggressively. Our tobacco margins are small enough already and this will make them smaller.

f. The ban will also affect customer service. A test conducted by one of our members in his shop showed that a display ban would double tobacco transaction times as the retailer has to search for the product each time it is asked for and, in some cases, when the first choice brand is not in stock or the customer doesn't know what else he wants, the retailer will have to open the display to show him. This will hold up queues and again, put us at a disadvantage to the multiples who could afford the extra staff costs necessary to compensate.

 

4. The NFRN and our members are particularly disappointed by the tactics used by the anti tobacco lobby groups to undermine our efforts to show the government why the display ban is a bad idea. ASH, Cancer Research UK and other campaigners do not run shops. We do. We know what impact a display ban will have and we know what is good and not good for our business. So, when these organisations say that retailers have been frightened into opposing the display ban by "industry scaremongering" they are insulting our intelligence. It is also offensive to say tobacco manufacturers use retailers for political lobbying. Again, retailers are expert in retailing and know better than anti tobacco lobbyists and the tobacco industry what is good for our businesses. There has been a deliberate and disturbing campaign to undermine the campaign of the NFRN members and dismiss our concerns by anti tobacco lobbyists falsely claiming that all or the majority of campaigning against the ban has been conducted by organisations funded by the tobacco industry. This is not true and the NFRN believes it is not proper for Government funded pressure groups such as ASH to try and undermine those who have a different view to theirs. Retailers are nobody's puppets.

 

5. We would also like to comment on some points made by ASH in its submissions to the Bill Committee. They say:

"ASH identified tobacco retailers located within a one mile diameter of a low income neighbourhood in London. All 40 venues were visited with interviews taking place on site. Almost 90% were independent retailers, 86% had gantries of the type provided by tobacco companies and 10% of these were fitted with automated dispensers called Retail Vending Machines (RVMs). Only 2 shops in the sample were free from industry paid for displays and both displays were small and discrete.

"The pattern of coercive contracts for displays reported to us was similar to that described by John (2009) and by Cohen (2009) (see paragraphs 22-26 and 32-35) and observed across England by MacGregor (2008). Manufacturers supply and control displays, checking them regularly before retailers qualify for incentives".

NFRN response:

· There is no such thing as a coercive contract. Our members that deal with tobacco companies do so voluntarily in their own best interests.

· Some of our members receive money from tobacco companies to display their products in a more prominent position than competitor products. We do not believe, nor is there any evidence that this practice encourages smoking. It is a simple fact that customers who have not made their brand choice before coming into the shop (or whose first choice is not in stock) are more likely to buy alternatives that are easier to spot on the gantry.

· Also, it is implied in ASH's statement that gantries that are "small and discrete" are acceptable. If that is the case, then why are ASH asking for a ban on tobacco products and not a regulation that requires tobacco gantries to be "small and discrete"? Gantries in small shops are "small and discrete". It seems that small shops are being punished because it is felt that gantries in large shops are too big.

"New studies add to the evidence that manufacturers concentrate prominent POS displays in poor neighbourhoods and near schools, targeting disadvantaged communities.

Retailers are largely powerless in the location, scale or nature of displays as these decisions are made by manufacturers"

NFRN comment: This is a nonsense. Retailers decide how their shops are run, not suppliers. ASH was able to find one retailer to imply something else otherwise, but this is very much the minority view. We are not anyone's puppets. The point is irrelevant anyway because ASH are not calling to regulate the scale or nature of displays, they are calling for a complete ban, even though they imply elsewhere that displays that are "small and discrete" such as those in small shops are acceptable.

" In Ireland the industry has had 5 years to prepare for Ireland's prohibition of POS displays which was included in the Public Health (Tobacco) (Amendment) Act 2004. They have used the time to make a considerable investment in RVMs, which are estimated to cost €10,000 each. The Irish Office of Tobacco Control reports that by 2008 68% of retailers were equipped with RVMs. More recent observations suggest that the proportion has risen substantially in advance of the regulations coming into force on July 1, 2009"

At least one tobacco manufacturer has advised their Irish retailers that the RVM's advertising panel will be removed by tobacco company personnel prior to July 1^st to ensure compliance with the regulations

The installation of RVMs in the UK appears to be at an earlier stage. ASH visited a sample of 40 premises in a low income neighbourhood in London. Of those shops with tobacco industry displays 10% were already equipped with RVMs suggesting that the industry has already made the first steps in fitting retail outlets with displays which can be adapted to comply with the legislation at minimal cost"

The problem of excessive POS displays is of the industry's own making, as is the solution. In Ireland RVMs are already ubiquitous and in the UK they have become increasingly common. These devices, which are owned and maintained by the tobacco manufacturers, can be easily adapted to comply with the legislation at a minimal cost. Click here to view an image of an RVM.

NFRN response: This statement is full of inaccuracies. The NFRN has an Irish branch which represents independent retailers in Ireland, so we are in a position to comment on it:

· RVMs are a feature that are almost exclusive to the Irish market where they were first rolled out in 1997. Typically they are given to larger retailers.

· Sometimes they have been sold to retailers but bigger retailers can get them for free. The Irish market retail market is entirely different to the UK market.

· Independent retailers occupy a relatively small proportion of the Irish market and the majority of them do not have RVMs. Like for like comparisons to the UK should only be made to this relatively small proportion of the Irish shops that have open shelf gantries as opposed to RVMs.

· With only a handful of exceptions, shops with open shelf gantries in Ireland have not received any assistance from tobacco companies in implementing the tobacco display ban.

· Only one UK tobacco company has supplied RVMs into the UK market. Upon reading ASH's submission, we contacted the manufacturer to find out if they would be supplying more in the event of a tobacco display ban. We were told that some RVMs were sold or supplied to retailers, mostly in 2006/2007 and mostly in central London. We were also told that at the beginning of 2009, there were 250 RVMs in the UK market (a tiny fraction of the total market); currently there are 247 because some of the shops have closed. So ASH's statement that in "in the UK they have become increasingly common" is simply incorrect.

There are a number of studies cited in the ASH submission about the relationship between retailers and tobacco companies in the US, again a very different market to the UK. They are irrelevant.

6. There has also been a sustained campaign to create an appearance of an evidence base for the display ban. That the evidence base is weak has been well established however. Studies that do not comply with standard methodological practice, surveys that use leading questions and the misuse of statistics form the entirely of the so called "evidence base". This has been well documented already and one commentator has claimed that the evidence actually shows that the ban will not work[1] A number of obvious inaccuracies are easy to spot in the recent submissions of Cancer Research UK and ASH to the Bill Committee. Cancer Research UK claim that:

"In Canada display bans have been introduced as part of a range of tobacco control measures. By 2007 six provinces had introduced PoS display bans and these coincided with a fall in smoking prevalence rates amongst 15-19 year olds from 22% to 15% in 2007.

 

Survey evidence in Iceland has also shown that youth smoking rates fell significantly after a display ban was implemented in 2001. Smoking prevalence rates amongst Icelandic 10^th graders (aged 15-16) dropped from 18.6% in 1999 (two years prior to the display ban) to 13.6% in 2003 - twice the rate of decline compared to the previous four year period.[xv] The Public Health Institute of Iceland (a statutory Government body) has indicated that these results give the most accurate view of youth smoking prevalence in the country."

 

NFRN Response: This is an inaccurate representation of the Canadian story. The fall in smoking from 22% to 15% was achieved between 2002 and 2007 - a time when the vast majority of the country in population terms was not covered by a display ban. Accordingly, this impressive decline in youth smoking actually co-incided with full displays in most of the country. The one state, Saskatchewan, that had a display ban - since 2002 - has had a far less impressive record. There, smoking amongst young people fell from 29% to 22%.

 

Also, the Iceland data presented by Cancer Research applies only to15-16 year olds. When you look at the statistics for the broader age category of 15 to 19 year olds, smoking rates did not decline at all.[2]

 

Cancer Research also reports the following:

 

"In the 2008 survey young people were asked (i) whether they had seen cigarettes displayed in shops in the last month (ii) how often they pay close attention to cigarette packets displayed in shops (never, rarely, sometimes, often or very often) and (iii) whether they agree or disagree that cigarettes should be put out of sight in shops (agree a lot, agree a little, neither agree nor disagree, disagree a little, disagree a lot). Findings revealed high awareness of cigarettes displayed in shops, with 82% of participants having seen cigarettes displayed in shops in the previous month; irrespective of age, gender or smoking status. Almost a third (32%) of regular smokers pay close attention to cigarette packets displayed in shops compared with 4% of never smokers. Almost two-thirds (64%) of 11-16 year olds agreed (a lot or a little) that cigarettes should be put out of sight in shops; mostly never smokers (72%).

 

NFRN Comment: The finding that 4% of never smokers do not pay close attention to cigarette displays (compared with 32% of regular smokers) proves the point that interest in smoking is a cause of exposure to cigarette displays, not the other way around. This, we do agree with and it does contradict the claim that Cancer Research make later in their document that "increased susceptibility to smoking among never smokers is less credibly a cause of increased exposure to PoS marketing"

 

We also have serious doubts that a survey of young people that does not use leading questions would find that most of them would support their removal from sight. The following story from Lord Norton on his blogsite is interesting:

 

"I was very interested in the response I got on the issue yesterday when I was visiting John Port School in Derbyshire as part of the Peers in Schools programme.  I variously begin such visits by eliciting pupils' views on issues which have been or are being considered by Parliament.   The students were overwhelmingly in favour of the ban on smoking in enclosed public places.  However, when I asked about banning cigarette displays in shops - and briefly mentioned the arguments on both sides - they were overwhelmingly against the ban."

 

7. In conclusion, in spite of a concerted campaign to discredit retailer concerns and create the appearance of an evidence base to support a display ban, our view stands that it will damage small shops and there is no credible evidence to suggest that it will prevent young people from starting to smoke.

 

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[1] Basham, P. & Luik, J. "Displaying their ignorance on smoking", Spiked (online), 29 April 2009.

[2] Statistics Iceland

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June 2009