The Federal Government’s decision to introduce plain packaging and a new tax hike on cigarettes is a mistake that will hurt small businesses in Australia says the Council of Small Business of Australia (COSBOA).
“COSBOA supports strong tobacco control measures to reduce the prevalence of smoking and disease in Australia, but prohibitive pricing and identical packages are not solutions to this problem,” said CEO Jaye Radisich.
“As long as tobacco remains legal to sell, purchase and consume, small businesses should not be inadvertently punished for selling it.
“There is simply no need for these extreme measures in order for the Government to pursue the health outcomes it desires. This has serious ramifications for hardworking small businesses that sell and make an income from a legal product.
“This tax hike means that customers will have less money available to spend in retail outlets on non-tobacco products, so the Government tax take will increase but sales will drop in small retail shops.
“Small businesses are already being hit hard from tobacco display bans implemented in some jurisdictions, which have imposed high costs on small businesses having to adjust their fixtures and storage areas as a result of the new regulations.
“Increasingly the tax on cigarettes will dramatically increase the price, and consumers will be driven to large national chain stores like Coles and Woolworths who can afford to wind back their profit margins to get customers through their doors.
“Of concern from a health and community perspective is the massive potential for the illegal tobacco market to expand in Australia. If the Government goes through with its plans to introduce plain packaging as well this would have serious and detrimental impacts across the community.”
Australian Governments have been extremely successful at driving down the number of people who smoke in this country and gradual, biannual tobacco tax increases, along with other tobacco control initiatives, have contributed to that success.
Every Government around the world that has considered mandating plain packaging has rejected the idea. These Governments recognised that identical packs would have huge potential to increase tobacco smuggling.
COSBOA urges the Government to look at tobacco control outcomes in countries like Ireland, Canada and the UK.
“These countries have introduced similarly tough tobacco control policies and they now have huge problems with illegal tobacco coming across their borders. Given the international evidence, it is unfair of the Government to put Australian businesses in a situation that threatens their livelihood without clear public health gains,” said Jaye Radisich.
