Plain packs in Oz boost illicit trade

Nine months after the introduction of plain tobacco packaging in Australia, a new report has shed some light on the effect the law has had on convenience retailing and the illicit trade in the country.

After much debate, standardised, or plain packaging, was introduced on tobacco products in Australia nine month ago. Now, independent research carried out by leading research firm Roy Morgan has revealed that hard-working retailers are seeing their businesses hit, while the illicit trade in the country is benefitting.

‘The Impact of Plain Packaging on Australia Small Retailers’ report says that 40% of retailers perceive that the illicit trade is having a negative impact on their business

To make matters worse, nearly nine in 10 small retailers expect an upcoming 12.5% excise increase in each of the next four years will contribute to a negative impact of illicit trade on their business.

“It was clear that plain packaging was going to have serious financial ramifications for convenience store owners and the latest research confirms this,” said Jeff Rogut, CEO of the Australasian Association of Convenience Stores (AACS). “Costs associated with increased transaction times, customer frustration, inventory management delays, as well as heavier staff workloads and training requirements have all been necessarily absorbed by convenience stores at their own expense, placing undue pressure on their bottom line.”

Rogut added that aside from the lack of consultation with retailers leading up to the introduction of plain packaging, the most frustrating aspect of this whole process was that, “with all the pain retailers have gone through, tobacco sales in convenience stores remain largely unaffected, with some stores recording an increase in tobacco sales.”

He said: “Despite the triumphant exclamations form various health lobbyists, the fact remains that tobacco plain packaging has had a negative impact on small retailers for no improvement in reducing the incidence of smoking.”

Rogut said that the AACS was pleading with Government at all levels to consult with retailers, who he called “those at the very coal face of legislative changes”. Calling the legislation ill-conceived, he concluded: “Small retailers would relish working with Government to develop and implement better solutions. What we don’t appreciate is being completely ignored before having to bear the financial brunt”.

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