The one thing that the government and the cigarette manufacturers agree on is that the impact will be significant. Given previous bans on advertising, sponsorships and other forms of marketing communication, the pack is the last bastion of branding activity. Health Minister Nicola Roxon says that she believes the new law will give Australia the best chance of having the lowest smoking rate in the world.
Manufacturers, for their part, have threatened legal action on the basis that the new rules restrict their trademark and intellectual property rights. The British American Tobacco Australia (BATA) issued a statement which said: "The result of BATA's legal challenges could force Health Minister Nicola Roxon to pay tobacco companies billions of dollars for the removal of trademarks, brands and pack space."
Assuming these legal challenges fail and the law goes into effect, what will happen? Will demand go down as expected? Not according to the cigarette manufacturers. They are actually predicting that demand will go up because they will be forced to compete on price. David Crow, CEO of BATA, says that's what his company intends to do: "We will obviously focus on pricing given it's the only thing really left to differentiate brands."
So could the unintended consequence of the legislation be that smoking actually increases because the market is flooded with cheap cigarettes? The cigarette manufacturers have an obvious interest in coming up with worst-case scenarios but this one does seem to have some merit.
6 comments:
We would see the impact of that law several months from now.
this test could also show the importance of distribution vs. marketing -- is being in the right places just as important as promoting the brand? hmmmm -- denise lee yohn
Love the end quote. For those companies that ignore building a brand usually are left to compete on price--a losing battle.
This is some of the most concerning legislation for anyone involved with branding. Forget about how you feel about cigarettes. If the High Court of Australia concedes to the new legislation the concept of 'goodwill' for a brand is in a precarious place. Generic white cans for Coca Cola due to risk of diabetes. Plain white wrappers for Big Macs 'cos a kid may get fat. cleanskins for Penfolds Grange due to liver disease. Where will it stop?
I agree this would be a very dangerous law. I don't even think it would help matters much as far as the number of smokers is concerned, but it's even more concerning marketing-wise. You can't just ask brands to renounce their proprietary brands just because you, as a government, think it's a good idea.
Then again, Australia has always had some pretty bizarre laws...
Oh!My god,I here lot from that.Its really very carring one and i got lot news about smoking.
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