What Plain Packaging Tells Us About Trademarks

The prestigious science journal Nature published a study in September 2020, that investigates the effectiveness of Australia’s 2012 Plain Packaging law on smoking rates in comparison to neighboring New Zealand, which first implemented a similar policy in 2018.

The study surprisingly reveals that tobacco consumption increased after Australia introduced plain packaging, as smokers traded down to less expensive tobacco products and used the savings to buy more cigarettes.

According to the study, in Australia, “plain packaging caused an increase in consumption equivalent to 6.5 cigarettes per week, compared to the consumption in New Zealand” when plain packaging was not in effect there.

Unfortunately, the global health community has not learned from these facts. It continues to push this failed policy for tobacco control— and increasingly is pushing it for other product categories such as food and beverage in the form of brand restrictions. For example, last year Singapore implemented plain packaging for tobacco, and Chile now restricts branding on certain snack foods.

Sadly, the Nature study’s authors do not recommend dropping the failed plain packaging policy, but rather they suggest combining it with other policies, such as taxes, that have proven to reduce smoking.

However, health regulatory regimes must learn from mistakes and allocate resources to policies that improve health outcomes—not gloss over a failure. With global health resources stretched thin, it is more important than ever to balance the implications of these policies.

Value of Trademarks

This failed policy experiment demonstrates that trademarks provide consumers with important information and create fair and effective market competition.

Consumers want choices and the information that brands provide—and they are willing to pay for it. Trademarks help lift products from being mere commodities to value-added products. When price becomes the chief differentiator in the market, producers have no incentive to invest in innovation or quality. The plain packaging experiment shows that consumers rely on more than word marks to make purchasing decisions; they also rely on color, shape, and other nontraditional trademark elements.

Importantly, trademarks also are key for consumer protection. Reports from Australia by KPMG and from the government of Ireland indicate that after implementation of plain packaging in these two countries, consumption of illicit—including counterfeit—tobacco increased.

The Way Forward

Policy makers and the public need to continue to be educated about the value of trademarks and the need to balance health policies against interests in intellectual property. This importantly includes weighing the best facts and evidence available.

INTA considers brand restrictions a critical issue that affects all brand owners and consumers, as emphasized by a 2019 resolution by its Board of Directors. The Association’s Brand Restrictions Committee has been actively advocating against plain packaging and brand restriction policies around the globe.

Although every effort has been made to verify the accuracy of this article, readers are urged to check independently on matters of specific concern or interest. 

© 2021 International Trademark Association