Commentary on Greenland (2016): Tobacco companies' response to plain packaging in Australia and implications for tobacco control.

Abstract

Greenland sheds light on how tobacco companies have responded to plain packaging in Australia, with brand rationalization, brand extensions, variant name modification and continued innovation. Regulatory options available for addressing potentially misleading brand variant names on packs include banning the use of certain descriptors, allowing only one variant per brand or banning the use of brand names completely. Greenland 1 found a decrease in the number of cigarette brands in Australia following the implementation of plain packaging. The CEO of Imperial Brands explains that in markets with declining volumes (which includes, but is not limited to, Australia) the focus is on sustainable profit 2. This can be achieved, in part, by delisting brands that are underperforming or have low market share, or merging them with stronger brands 2. Brand rationalization, therefore, appears to be driven by a desire to reduce costs and complexity 3 rather than being a direct consequence of plain packaging. As the number of brands has decreased, the number of variants for the leading brands has increased, countering the argument that plain packaging would make it difficult to launch brand extensions. Notably, the inclusion of colour within variant name increased by more than 50% from 2011 to 2015, with a small number of recognizable strength indicators (blue, red, gold, silver, green, white) accounting for most of these. While experimental research has found that perceptions of strength, appeal, quality, taste and ease of quitting are influenced by colour descriptors on plain packs 4-6, additional studies in a market where packs are plain would be of value. Should the Australian government decide to regulate variant name, what options are available? A ban on colour descriptors would seem appropriate if they are being used by consumers as an indicator of product harm, although such a ban would probably need to encompass brand name, as some companies appear to have responded to plain packaging by including colour within the brand name (e.g. ‘Marlboro Red’) rather than using it as a variant. Another option would be to only permit one variant per brand, as required in Uruguay. Although Greenland 1 explains that in Uruguay tobacco companies responded by introducing a number of new brands, this would be more challenging in Australia, given that packs do not have full branding, the focus is on brand rationalization and 10 of the leading brands (B&H, Choice, Dunhill, Pall Mall, Winfield, Longbeach, Marlboro, Peter Jackson, Horizon, JPS) have more than 100 variants between them. It is perhaps with a ban on multiple brand presentations in mind that Philip Morris, the company which challenged the legislation in Uruguay, appear to have split their most valuable asset (Marlboro) into a number of separate brands (Marlboro Red, Marlboro Gold, Marlboro Silver, etc.) in Australia. The most radical option, which was apparently under consideration by the Turkish government in 2011, would be to ban brand names on cigarette packs and replace them with numbers 7. Little detail is provided as to how this would work in practice, but one approach would be to assign numbers alphabetically to all brand variants available on the market at the time of the legislation; so in Australia, for instance, Alpine Fine Menthol would be ‘1’, Alpine Original Menthol ‘2’…. Winfield Original Sky Blue ‘159’, Winfield Original White ‘160’, etc. Brand variants launched thereafter could be assigned the next highest available number. This information could be communicated to consumers via product lists in shops containing all relevant details (number on pack, corresponding brand name, pack sizes available, price), just as price lists are used currently by retailers in Australia and other markets where tobacco is not allowed to be displayed openly. Putting the viability of such a proposal to one side, it speaks to three points made by Greenland 1: (1) the centrality of the brand to tobacco marketing, (2) the failure of legislation to tackle the brand directly, with the focus instead on the marketing tools used to support it, and (3) the fact that plain packaging does not prevent brand and/or variant name communicating potentially misleading product information. While plain packaging has reduced opportunities for innovation and created a hostile market for tobacco companies, they are adept at navigating market challenges and legislation. Greenland 1 found evidence of product innovation post-plain packaging, with the introduction of kreteks and demislims. Filter innovation, beyond the use of a single flavour capsule in the filter, also seems inevitable given that tobacco industry journals suggest that plain packaging has heightened interest in novel filters 8. There is even evidence of packaging innovation in Australia, with recent reports of ‘Peter Stuyvesant Originals Blue’ having a removable foil soft pack inside, allowing users to retain this and discard the plain pack 9. This is unlikely to be an isolated incident, particularly as other countries begin to implement plain packaging. In May 2016 British American Tobacco sought applications for a ‘Packaging Structure and Innovation Manager’ in England, with the job description explaining that: ‘In countries with specific design legislation, e.g. TPD or plain packaging, the pack format is a key differentiator for tobacco packaging’, with the role of the packaging structure and innovation manager ‘supporting the business on this critical path with innovative ideas to bypass certain restrictions and legislations with new ideas to provide attractive and functional packaging for our products’ 10. Tobacco companies clearly view plain packaging as just another obstacle to overcome. None.