We shall soon be voting on the EU’s Tobacco Products Directive Two (TPD2). The effect will be to create a field-day for counterfeiters; make fake cigarettes easier to manufacture and supply; and increase the market for fakes, which will have the effect of increasing accessibility to young smokers, as cigarettes are sold cheap from the boots of cars in pub car-parks. It will also cost thousands of UK jobs, and cause the closure and/or off-shoring of a number of companies.
I’ve just come back from a hearing organised by my good colleague Godfrey Bloom. And it wasn’t the cigarette industry. No. It was actually the packaging industry, who will feel the major impact of this “plain packaging” regulation.
They came up with a simple illustration of the problem. If I ask you to decorate a room just like the plain white room next door, you’ll have little difficulty. All you need is a B&Q and a paint roller. But if I ask you to decorate a room into a passable imitation of the Sistine Chapel, you might struggle a bit.
The whole art of packaging for cigarettes, a joint enterprise between tobacco and packaging companies, is to make not only a pack which protects the product and is attractive to consumers, but also to make life difficult for fakers. The packaging guys are telling us that the TPD2 rules, which set very tight criteria for all cigarette packaging, mean that packs will be hugely easier to copy. And the fact that they will not change means that the fakers won’t have to play an on-going game of catch-up. This, they say, is a dream come true for the counterfeiters.
Remember that counterfeit cigarettes do not necessarily conform to industry quality standards, and therefore may be more unhealthy. Remember also that duty (and VAT) are not paid on counterfeit cigarettes. The loss of revenue to the Exchequer is currently estimated to be £3.1 billion.
We heard from a German packaging company, Weidenhammer of Hockenheim, who have an innovative pack for hand-rolling tobacco. It’s a sealed tin, which is well-received by consumers. But the Commission has arbitrarily ruled that such tobacco can only be sold in old-fashioned pouches. If the Directive goes ahead, they will have to close their factory, and their investment, and their jobs, will be lost.
Closer to home, we heard from Promopack Digital Studios, which employs 60 people in Heanor, Derbyshire. Their MD expects those jobs to be lost if TPD2 goes ahead. But it gets worse: the inevitable growth of the counterfeit business also threatens tobacco industry jobs elsewhere in the region.
I was surprised to see Bill Newton Dunn at the event. He got in the first intervention. He said they had to recognise that new regulations often meant that certain products or processes were redundant, so factory closures and job losses were just the price we paid for progress. He didn’t actually say “I don’t give a toss about your jobs and factories”, but he might as well have done. And he went on to say that the real problem with counterfeit was inadequate border controls and policing, entirely missing the well-made point that regardless of enforcement, TPD2 will make counterfeiting much easier.
When I got a word in, I pointed out to the Promopack MD that he had 60% of his East Midlands MEPs present — BND, Derek Clark and myself. And I drew attention to the way that badly drafted regulation has the effect of setting current technology in aspic, and standing in the way of innovation, as with the new Weidenhammer packs.
I also pointed out that on some issues, like climate change and hating tobacco, MEPs have an almost religious zeal. They simply won’t engage with the arguments. They thoughtlessly vote for whatever superficially appears to support their obsession. TPD2 will increase harm from tobacco, reduce quality, make cigarettes more widely available, and deny revenue to the Treasury. It’s typical of the EU’s perverse incentives and unintended consequences. If only they’d stop to think.