U.K. Puts Plain Tobacco Packaging Back on Agenda With Review

Photographer: Carla Gottgens/Bloomberg

Australia became the first country to introduce plain packaging on Dec. 1. Close

Australia became the first country to introduce plain packaging on Dec. 1.

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Photographer: Carla Gottgens/Bloomberg

Australia became the first country to introduce plain packaging on Dec. 1.

The U.K. government reversed its position on plain cigarette packs for the second time in four months, announcing a review of how the policy is working abroad.

Health Secretary Jeremy Hunt said in July the government was postponing its plans to introduce plain packaging. Facing the prospect of defeat in the House of Lords over the issue, the government said today it had always intended to look again at the issue. Legislation paving the way for a ban on branding will be introduced.

“We must do all we can to stop young people taking up smoking in the first place,” Health Minister Jane Ellison told lawmakers in the House of Commons in London today. “We are having a short review of the emerging evidence base.”

The review, conducted by paediatrician Cyril Chantler, will look at the public health benefits of the change and report in March, Ellison said. Clauses will be added to the Children and Families Bill, currently passing through the upper House of Lords, to introduce “a regulation-making power” for plain packaging, she said.

“If the government decides to proceed, this will allow the introduction of standardised tobacco packaging without delay,” Ellison said.

Imperial Tobacco Group Plc was down 2.8 percent in London trading. The company makes 21 percent of its profits in the U.K. and 13 percent of its sales.

Photographer: Chris Ratcliffe/Bloomberg

Packets of Lambert and Butler cigarettes sit in protective wrapping ahead of distribution at Imperial Tobacco Group Plc's factory in Nottingham. Close

Packets of Lambert and Butler cigarettes sit in protective wrapping ahead of... Read More

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Photographer: Chris Ratcliffe/Bloomberg

Packets of Lambert and Butler cigarettes sit in protective wrapping ahead of distribution at Imperial Tobacco Group Plc's factory in Nottingham.

According to Chris Wickham of Oriel Securities, who has Imperial Tobacco (IMT) as a “Buy” recommendation, plain packaging has made little difference to sales where it has been tried. “Evidence from Australia so far shows no impact on market trends,” he wrote in a research note today. “Furthermore, brands continue to drive cigarette market trends even in a plain pack market.”

‘Open Mind’

The government was forced to act after members of the Lords, Parliament’s upper chamber, began to indicate they would support an amendment to the Children and Families Bill demanding plain packaging within six months. To head off defeat, ministers will introduce their own amendment.

Deputy Prime Minister Nick Clegg said the government is keeping “an open mind” on plain packaging until the review concludes in March.

“If the review, as I have to say personally I rather hope, suggests that the emerging evidence argues in favor of plain packaging it’s a measure which we would then proceed with,” he told LBC Radio today.

With an election 18 months away, ministers are looking to shut down issues where the opposition Labour Party has an advantage, and where the government may also lose votes in the Lords, where it has no majority. This week the government switched position on payday loans. Next week Chancellor of the Exchequer George Osborne will use his Autumn statement to announce measures to cut energy bills.

Australia became the first country to introduce plain packaging on Dec. 1. All cigarettes in the nation must be sold in uniform packs, with the brand name relegated to the bottom quarter of the package on a brown background. The law is being challenged at the World Trade Organization and at arbitration.

To contact the reporters on this story: Robert Hutton in London at rhutton1@bloomberg.net; Thomas Penny in London at tpenny@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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