Closing the last-chance saloon

The retail display of cigarettes in a shop, with the packs often arrayed on shelves right behind the counter, is the last bastion of visual marketing, once, as is the case in many countries, media advertising is banned or severely restricted.

Iceland was the first country in the world to implement a display ban, in August 2001. Tobacco products are kept in drawers or under the counter. Ireland was the first country in the EU to ban display, with implementation in July 2009.

In Norway, the display of tobacco products and smoking paraphernalia has been banned since January 2010. The ban does not apply to specialist tobacco stores but there are not many of these – fewer than a dozen according to reports.

With empty shelves, German tobacconists protested against a display ban

With empty shelves, German tobacconists protested against a display ban

To date, six countries have tobacco product point-of-sale (POS) display bans: Australia, Canada, Iceland, Ireland, Norway and Thailand, but there are more in the pipeline and the industry is concerned that, as in the case of public smoking bans, the trickle will become a torrent.

Display bans in the pipeline

Scotland’s parliament has voted to ban retail cigarette displays and cigarette vending machines. The UK Health Act 2009 requires cigarettes, cigars, pipe and roll-your-own tobacco to be hidden from view in England, Wales and Northern Ireland, from October 2011 in large retailers and from October 2013 in smaller outlets.

A ban on tobacco displays in Finland will come into effect on 1 January 2012, with vending machines following from 1 January 2015. At a recent meeting in Dubai, the Gulf Co-operation Council’s Committee for Tobacco Control made recommendations that the open display of tobacco products should be banned from hypermarkets and outlets selling groceries.

In Canada, display of tobacco products is not banned by federal law but the provinces have prohibited it. The same is happening in Australia. The Australian Capital Territory (ACT), New South Wales, Victoria, Western Australia and Tasmania have all passed legislation prohibiting the display of tobacco prod‧ucts, with implementation between 2010 and 2013. A federal-government-appointed taskforce recommends that display be prohibited in all states and territories.

Legal challenges to display bans

The objective of tobacco control legislation in banning retail display is to eliminate impulse purchases, with the younger smoker particularly in mind. POS display bans appear to be an issue, along with legislation threatening to impose plain packs, which the tobacco industry will resist with all means possible. To date, legal challenges have been mounted in England, Scotland and Norway.

The idea behind a display ban is that by further reducing advertising, more people will stop smoking or smoke less: in other words, some people who would not otherwise do so, buy cigarettes because they are on display in a retail store. This is something the tobacco industry disputes. According to a study conducted for Philip Morris International (PMI) by LECG, a finance and economic consultancy, the point-of-sale display ban in Iceland has had no statistically significant effect on reducing smoking prevalence.

However, the fact that, aside from the tobacco industry, the main objectors to display bans are retailers, suggests the view is that sales (at least legal sales) are hit by display bans.

Striking a balance

As with other types of tobacco control legislation, such as smoking bans in bars and restaurants, representations from businesses can cause laws to be toned down. This has happened in Germany and Croatia and could also happen in the UK over the display ban.

According to reports, the ruling Conservative/Liberal Democrat coalition’s department for business innovation and skills is currently negotiating changes to the implementation of the Health Act, resulting in the public health minister Anne Milton telling MPs the government is “developing options around the display of tobacco in shops” that seek to strike a balance “between public health priorities and burdens on business”.

The industry position is display bans do not reduce smoking but, as PMI has stated, “prevent adult consumers from seeing the available product range and overly restrict competition”. Imperial Tobacco has stated banning tobacco displays would have no impact on young people smoking, but would place an additional burden on retailers.

British American Tobacco (BAT) has stated a display ban damages the livelihoods of thousands of small businesses and opens the door to illicit trade. The company announced in April 2010 that its UK subsidiary, plus two retailers and a German cigarette manufacturer, were seeking a judicial review of the government’s ban on the display of tobacco products in shops.

The illicit argument

In the UK the National Federation of Retail Newsagents (NFRN) has expressed concern over restricting the display of tobacco products in shops. This is part of the new department of health consultation entitled “The future of tobacco control”. The concerns relate to security, counterfeiting and the cost of the transition to a tobacco display-free retail environment. The NFRN believes keeping cigarettes under the counter may encourage counterfeit tobacco trading and reduce customer confidence.

The retailers’ concern of growth in illicit sales is not only that consumers will turn to buying cigarettes online the retail environment, but that unscrupulous vendors will more readily be able to mix their legitimate offering with illicit because, if the products are not on open display but under the counter, the consumer will not be able to recognise the difference between illicit and legitimate so easily.

The concern is also expressed that under the counter means under the radar and that display bans will mean more pressure from criminals on retailers to stock illicit products.

Imperial claims Ireland has seen a sharp drop in excise duty receipts from tobacco sales since cigarettes were forced under the counter – implying a rise in smuggled and counterfeit trade. In 2009 an estimated 27 per cent of cigarettes smoked in Ireland were not duty-paid, though this could be due, in whole or in part, to growth in cross-border trade with Northern Ireland driven by the pound weakening against the euro.

According to some Northern Ireland retailers, youth smoking in Canada has gone up rather than down since the display ban, suggesting that it is through friends or family that the majority of under-age smokers get their tobacco products rather than via impulse purchases. However, verifying such a proposition in the Canadian market is particularly difficult because of the major illicit trade problem.

Does it work?

The display debate revolves around three issues: do display bans reduce smoking prevalence? Do they stop new smokers starting? Do they encourage illicit trade? The difficulty in assessing the impact of any tobacco control measure is isolating it from the effect of other tobacco control measures.

Survey findings of retailers’ organisations and the tobacco industry and those of the tobacco control lobby, not surprisingly, differ. NFRN quotes a report published by the Institute of Economic Affairs, which says display bans have failed to reduce smoking in every country introducing them, while “smoking rates in Canada, Ireland and Thailand are increasing since bans were implemented, as is the black market for tobacco”.

However, such findings are disputed and more display bans seem likely. The EU commissioner for health and consumer policy recently called for new regulations, including a display ban in shops and supermarkets. While in Northern Ireland a ban as of July 2011 is proposed which, according to the health minister, is in order to “protect our children and young people and support those smokers in our society who are attempting to quit”.

In Scotland a judge recently dismissed a legal challenge by Imperial Tobacco against the ban on displaying tobacco in stores, on the grounds that none of the challenges the company had made were “well founded” since the aim of the legislation was “to reduce smoking among children and thus to improve public health”.

This will not, however, deter the tobacco industry, or retailers who feel their businesses threatened, from opposing display bans wherever they are proposed, on the grounds that, as one of the major companies recently stated, “display bans erode adult freedom of choice and the right of retailers to display and sell a legal product”.

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