Plain Packaging: A Trademark Of Nanny State Failures – OpEd

The Golden Arches. The Swoosh. Pegasus. Four interlaced rings. The red and yellow shell. Three stripes. The WB shield. An apple with a bite taken out of it. Most, if not all, of these descriptions of logos probably made a certain worldwide brand pop into your head. It probably made you remember the last time you used that product or service. The companies who spent millions of dollars developing the symbols hope it makes you experience a good feeling and a desire to go back and buy more of that product or service.

What would you think if one day the government decided that the makers of The Swoosh couldn’t use their logo because the product is made overseas? Or the four interlaced rings company makes a product that goes just too fast and is restricted to only making generic, unbadged vehicles? What if you worked for the company that puts three stripes on all its wares and the government decided that company could no longer mark its products that way because the materials they use are unsustainably sourced?

Most people would realize the absurdity of this regulation. People who were employed by these companies would have no trouble realizing the obvious threat to their livelihoods. Few would stand for this type of ridiculous and damaging regulation.

Yet, this kind of nonsensical regulation is exactly what is happening to domestic companies who happen to be in the business of making and selling tobacco products.

Former French president Nicolas Sarkozy recently (and presciently) observed the following regarding plain packaging: “If we accept the neutral cigarette packet, in six months you will be offered a neutral bottle of wine, and this will be the end of our names; it will be the end of our land; it will be the end of our know-how.” Sarkozy encapsulated in a few words the risk the market faces when the state denies the seller of a good the right to advertise it on the very product itself – the inability to set his product apart hurts the seller of superior goods by impeding upon the consumer’s free choice in the product he consumes, and opens the door even wider to counterfeiters. Trademark French products, like wine and cheese, stand to lose nothing less than their globally-recognized status for quality in the din of lesser products and counterfeits.

The damage done by denying producers their intellectual property rights are more than just losing a pretty label to look at. According to research done in Australia, when faced with that country’s plain packaging law, frequent smokers turned to the black market, fueling an unprecedented increase in the illegal tobacco industry. The black market grew by 30% in one year, leading to a $1.35 billion loss to taxpayers.

Not only is plain packaging an impingement on free choice and a boon to smugglers, it is also basically redundant. According to the laws of the European Union, almost two-thirds of the product’s packaging is already appropriated by the state and plastered with warnings. What limiting the remaining one-third to, in the words of France’s Health Minister Marisol Touraine ‘the same shape, same size, same color, same typeset’ is supposed to accomplish that pictures of cadaverous people dying from cancer can’t is laughably unclear.

Just like plastering pointless labels on the packages was a prelude to losing the rest of the label to the state, so plain packaging will be a step on the road to pointless warning labels on other items the state deems harmful, like liquor and fast food. Slippery slope? Not according to the experts. They believe it is just over the horizon. “Often tobacco, whether it’s litigation or regulation, is the canary in the coal mine,” says Benjamin Rubinstein, an attorney, “and I think public health authorities rightly want to encourage healthier lifestyles and there are a variety of ways they can do that.”

In the Republic of Ireland, the Department of Health is contemplating seizing label space on alcoholic beverages by mandating warning labels. The labels are to include “health warnings and advice,” grams of pure alcohol, and calorie information. Clearly emboldened by the success in bullying the tobacco industry into compliance, the proposal goes further, mandating liquor-license holders annoy their patrons with the information for alcoholic beverages sold on draught, and requiring liquor producers dilute their message by putting this information in their promotional material. All of this information is, by the way, easily found by anyone with the desire to know it, an Internet connection and five minutes of time.

The damage is not restricted by borders, either. Goods that must comply with oppressive plain-packaging regulations risk retaliatory regulations imposed on domestic products exported abroad. Here too the precedence has already been set – two years ago Indonesia threatened to impose plain packaging upon imported Australian wine in response to Australia’s plain packaging requirements. They are now threatening to do the same against French wine. Are the marginal proven gains in public health domestically worth trade retaliation against millions of dollars’ worth of domestically produced products abroad?

Plain packaging is more than just run-of-the-mill nanny-state silliness. It represents a tangible harm to the economy that far outweighs any possible effects, and it opens the door to even more of the same. If the state believes it has a mandate for protecting the people living within its borders, implementing this kind of regulation won’t do it.