Plain packaging laws will give a competitive advantage to criminals

The Financial Times was quick to praise David Cameron for his support to introduce plain packaging of tobacco. “This law – likely to be passed by MPs in a free vote – will be the most significant step in years to boost public health in Britain. It is welcome,” it thunders.

This is a remarkable claim. Even supporters for the measure admit the evidence is marginal and the impact expected to be small. Perhaps the newspaper believes there has been little progress on public health in recent years.

The letters pages were mainly silent on the FT’s stance. Noteworthy was a response from Britain’s greatest living artist David Hockney. He advised the FT: “You state that cigarettes will be sold in ‘boxes decorated in an off-putting shade of olive green’. I don’t believe there are ‘off-putting’ colours, especially for a cigarette packet. The colour will be quite beautiful in a couple of weeks.”

But I think there is a smarter objection based on the ideas of Adam Smith. In the Theory of Moral Sentiments, he warns against leaders with a scheme to remake society according to some master plan of vision.

“He warned that such people fall in love with their vision of the ideal society and lose the ability to imagine any deviation from that perfection,” writes Russ Roberts in his excellent book How Adam Smith Can Change Your Life.

Adam Smith “is giving a fundamental warning to politicians and those who would support them: when you are trying to legislate behaviour in a complex world, you have to remember that people have certain natural desires and dreams. Human beings like to do what pleases them.”

Roberts points to the war on drugs, which has failed because “too many people like to use drugs. And too many people see those desires as a potential for profit, which it surely is. It’s very hard to stop that natural propensity to truck, barter, and exchange. Transactions will take place between people who want to use drugs and those eager to serve that desire because of the profit that follows.”

The war on drugs persists for many reasons. But one of them is that “a lot of regular, everyday people who simply believe that taking drugs is a bad idea continue to support the policy… People have trouble with the idea that it’s OK for recreational drugs to be legal while still discouraging children and others from using them.”

On smoking, Roberts notes that use has fallen by 50% in the second half of the last century, even though smoking remained legal. “That’s a massive change. Sure, say the critics, but we could have and should have cut it to zero. But that’s a fantasy…”

Smoking rates are being cut in a way that is more effective than the war on drugs. Beware the criminal opportunity! In a world where the lowest cost producer is going to win because price is the only marketing differentiator, Government is handing a competitive advantage to the criminals.

The world is a complex place. If I was an MP I would vote against this proposal. As my customers make a living from responsibly selling a legal product to adult smokers and as my company earns money from the tobacco industry communicating to shopkeepers, you could say that of course I would say that.

But Russ Roberts, an economist at Stanford University, puts a better case than I could make on my own. The world is a complex place. Managed decline is better than anarchy. The FT is guilty of wishful thinking.

If you want to write to your MP and explain how plain packaging will affect your business, use our template letter as a guide.


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