Tobacco consumption in Australia continues to plummet in the wake of the plain packaging laws

Thu, 12 Mar 2015  |  

Recent data from the Australian Bureau of Statistics confirms that the household consumption of tobacco continues to fall.

The decline has been particularly pronounced in the aftermath of the introduction of plain packaging laws in December 2012, which occurred around the same time that the excise charged on tobacco sales was increased.

In the two years since the plain packaging laws were introduced, using ABS data on the volume of tobacco consumed by the household sector, tobacco consumption has dropped a staggering 12.8 per cent and in the December quarter 2014, it was at the lowest level ever recorded (ABS data stretch back to 1959). That is an average drop of around 1.4 per cent per quarter. If this was GDP growth, the economy would be in a severe depression.

In per capita terms, the volume of tobacco consumed has fallen by approximately 16.5 per cent since the plain packaging laws came into effect. This means that either the number of people smoking has falling sharply (I note that around 30,000 people will have died of smoking related illnesses since plain packaging was introduced which may account for some of the decline) or among those who do smoke, the average consumption of tobacco has fallen.

Quarterly change in the volume of tobacco consumed (seasonally adjusted, household consumption):

Dec 2012: -2.9%
Mar 2013: -0.8%
Jun 2013:  1.4%
Sep 2013:  0.7%
Dec 2013:  1.1%
Mar 2014: -8.2%
Jun 2014:  1.3%
Sep 2014: -2.8%
Dec 2014: -2.9%

This is dreadful news for tobacco companies and is why they are engaging in a desperate attempt to slow or even stop the spread of plain packaging laws into other countries. They have failed in Ireland where plain packaging laws have taken effect and in the UK, where they will take effect in 2016.

Public health advocates around the world will be thrilled with the success of the plain packaging laws in Australia.

The business model of the tobacco companies, like all other private sector firms, is to grow and maximise sales and to increase the number of customers which means, quite obviously, having more people smoke. Anything that reduces the number of customers or the amount of tobacco each customer buys in damaging for their business model. This means the success of the plain packaging laws in Australia in cutting the volume of tobacco consumed is, in the eyes of the tobacco companies, to be fought wherever possible.

For the sake of the health of the general population, let's hope they fail.

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