The Australian Association of Convenience Stores (AACS) has disputed the Cancer Council’s claims that plain packaging has had no impact on small retailers.
According to the study commissioned by the Cancer Council, the research showed the switch to plain packaging for tobacco products had not driven business away from small retailers.
The report also concluded that the switch had not prompted smokers to switch to cheaper Asian-imported brands and had not triggered a rise in illegal tobacco use.
AACS CEO, Jeff Rogut, said the growing claims by health lobbyists that plain packaging is working, and that it is not negatively impacting retailers, is both damaging and insulting to those in the industry.
“We have every respect for the work Cancer Council Victoria does in improving health outcomes. However problems arise when bodies such as this presume to be experts in the retail sector and present their findings as truth,” Rogut said
“The additional costs that small retailers in Australia have been forced to absorb as a direct result of plain packaging have seriously impacted their bottom line.
“The cost burdens associated with additional staff training, labour, product handling errors, increased inventory management procedures and customer frustration have been substantial.
“These impacts were always obvious to retailers – those at the front line. This is why it was so disappointing for the previous Australian Government to introduce such a destructive measure without consultation with industry and with no evidential basis.
“Unsurprisingly the policy, to date, has backfired. The volumes of legal tobacco sold remain constant and in some cases, as reported in the recently released AACS 2013 State of the Industry Report, actually continued to increase, while the black market trade of tobacco in Australia has escalated to unprecedented levels,” he said.
Another serious impact of plain packaging has been the shift in consumer purchasing habits to cheaper brands and products.
According to Aztec, the total value of tobacco sales in the convenience sector in Australia for the 12 months ending June 2014 showed strong growth at 7.3 per cent.
Driving this growth in tobacco consumption was the sub-value or ‘cheaper’ segment, which grew in total sales by 61.7 per cent over the course of the year.
“As tobacco branding has been eroded, price has emerged as the main driver behind tobacco purchases. This is another unintended consequence of plain packaging and another example of what happens when legislation is introduced with no foundation in fact,” Rogut said.
