Commentary

Can the UK Avert a Smoking Irish Failure?

By Patrick Basham and John Luik
This article appeared on politics.co.uk on October 29, 2009.

This week, the Garda, along with HM Revenue and Customs, made the largest haul of contraband cigarettes in Irish history, with 120 million cigarettes worth over £45 million seized in Co. Louth. Shortly after the display ban took effect in the Republic, cigarette smuggling was costing £750 million in lost duties and VAT, with 25 percent of cigarettes smoked in the country now contraband. As the Irish Examiner reported, ‘the illegal trade is reaching epidemic proportions’.

None of this was supposed to happen, of course. During the recent UK debate over banning tobacco displays, the government repeatedly assured parliamentarians that not only would such a ban not increase the already large UK illicit market (HMRC estimates that 26 percent of all cigarettes consumed in the UK are non-duty paid and some 70 percent of seized cigarettes are counterfeit), but it would result in a significant decline in smoking, particularly among young people.

But the evidence from across the Irish Sea shows that both of these claims are simply false.

[B]anning tobacco displays not only drives the illicit cigarette market; it also does nothing to reduce smoking.”

There are several reasons why banning tobacco displays drives the illicit tobacco market. First, by putting all tobacco products under the counter, a display ban undermines the belief that tobacco is a legal, regulated product and that selling and consuming counterfeit and smuggled tobacco products are crimes. Surveys in Canada have found, for example, that a majority of Canadians who buy illicit cigarettes do not believe that they are committing a crime.

Second, display bans fuel the illicit tobacco market by making it more difficult for customers to distinguish between legal and illegal products, since all tobacco is hidden from view. Third, display bans make it easier for dishonest store keepers to mix illicit and untaxed tobacco products and legitimate taxed cigarettes and thus to pass off illicit products.

Fourth, display bans make it more difficult for enforcement agencies, already overtaxed, to identify illicit tobacco products since all tobacco products are hidden from view. Fifth, through blurring the distinction between above and below the counter products, between legal cigarettes and illegal cigarettes, a display ban makes it more likely that smokers will increasingly get their tobacco from illegal as opposed to the legal and regulated tobacco market.

But banning tobacco displays not only drives the illicit cigarette market; it also does nothing to reduce smoking. To return to Ireland again, a just-released EU survey found that 33 percent of the Irish population smoked, which is the highest rate in the last eleven years. Since 2007, tobacco taxes have increased and tobacco displays banned, but smoking prevalence has increased from 29 percent to 33 percent. Even more alarming is the fact that the largest cohort of smokers is now aged 16-30.

The same lack of effectiveness for draconian smoking measures, such as a public smoking ban, is found in England. The NHS recently released a study, ‘Statistics on Smoking’, which found that the public smoking ban had not resulted in a statistically significant decline in smoking. Indeed, certain groups, such as young males, are in fact smoking more than before the ban.

Part of the reason for these increases in smoking, particularly in the young, is that many smokers find these heavy-handed measures unacceptable. They are what psychologists call ‘reactant’, that is, they push back against regulation and assert their freedom through engaging in the very activity that the state is trying to prevent.

Hence, far from preventing smoking, measures like a display ban actually encourage it in those young people already most susceptible to begin smoking.

Therefore, in a UK with a tobacco display ban, we can expect to see not only more smokers, particularly young smokers, but also an enormous increase in illegal, unregulated, and untaxed cigarettes. That’s quite the public health ‘success’.

Patrick Basham is director of the Democracy Institute and a Cato Institute adjunct scholar. John Luik is a Democracy Institute senior fellow. They are coauthors of Hidden in Plain Sight: Why Tobacco Display Bans Fail.