War on tobacco undermining its cause

Recently, under heavy pressure from the anti-smoking lobby, Health Canada has announced new mandatory labeling for tobacco products. In 2001, Canada passed the first legislation in the world to mandate the labels to cover 50 per cent of the tobacco packaging on the front and back. Recent changes will increase label coverage to 75 per cent and display a phone number for a quit-smoking hotline. This move is part of a larger amped-up war on tobacco that has occurred since 2000 and amidst the flourishing contraband market.

Before I take a position on what to many is a fairly open and shut issue, let me point out that I have never picked up, let alone smoked a cigarette in my life and don’t plan on doing so. I prefer to slowly kill myself with a steady deep fried diet, eating enough chicken wings to put a chicken farmer’s kid through college the way no government subsidy ever could. I am also not a shill for the tobacco industry, though I do think Nick Naylor in “Thank You for Smoking” is one of the most badass movie characters ever.

It strikes me though that this continued war on tobacco is getting a bit absurd. Does anyone honestly think that bumping up the warning label size from 50 per cent to 75 per cent will actually change habits or keep young people from taking up smoking? Now the anti-smoking lobby claims that these labels have a positive effect. However, the evidence is far more dubious once held under a microscope.

They point to focus groups of smokers and non-smokers (probably with fairly leading questions) who say that the bigger labels are more effective, and that disgusting pictures of the effects of tobacco use have a greater impact than words alone. This same logic is, of course, used by extremists in the pro-life movement when they obnoxiously shove pictures of dead fetuses in people’s faces, but is it truly that effective? I believe that heavy saturation can desensitize you.

There are two major problems with the focus group studies. Firstly, the results cannot be generalized to the greater public because of a small sample size. Secondly, they do not adequately link immediate impressions with long-term changes in behaviour. Does the labeling actually have an impact in changing smoking habits?

Some studies point to mild decreases in tobacco consumption, but they do not isolate labeling from other anti-smoking measures such as education campaigns in schools and sin taxes or the rise of contraband tobacco. In fact, smoking prevalence declined even amidst a roll back of taxes in 1994 and a complete absence of warning labels. The case for mandatory labeling is flimsy at best. It strikes me as nothing more than a feel-good measure adopted by politicians to appease a very powerful lobby.

The tragic part of all of this is that this continued war on tobacco could undermine the cause it purports to support. Studies have shown that consumers treat contraband tobacco as a near substitute for legal tobacco. In economic terms, this means that as the price rises or other measures are taken to make purchasing the legal product less desirable, consumers will switch to contraband tobacco, which can come in unmarked bags of 200 or more.

This is exactly what is happening. Estimates of the share of the market held by contraband tobacco range from 27 per cent to 40 per cent. This is not new to Canada, however. In 1983 contraband market share stood at one per cent. This increased to 31 per cent in 1993 amidst hikes in tobacco taxes on the order of 104 per cent.

In response, the federal government in response slashed tobacco taxes from $19.14 to $7.29 per carton and contraband sales returned to previous levels. A new anti-smoking strategy initiated in 2001 to increase taxes by 137 per cent in the past decade has led to the flourishing of the contraband trade we see today. Seizures of contraband have increased from 39,773 cartons in 2002 to a record 965,688 in 2008. The government seems to lack the ability to learn from the past.

The share is even higher amongst demographics that are the most price sensitive: the lower classes and youth. Studies by the Arcus Group were conducted to give a rough estimate of contraband cigarette presence in high schools. They surveyed and collected the cigarette butts lying on the ground of 100 different high school grounds in Ontario and Quebec. The most recent study found the presence of contraband increasing from 36 per cent to 45 per cent in Quebec and 26 per cent to 30 per cent in Ontario between 2008 and 2009.

Contraband cigarettes are smuggled in from south of the border with native reserves often used as distribution points (50 per cent of contraband cigarettes flow through native reserves in Ontario and Quebec). This practice robs the government of an estimated $2 billion in tax revenue. It also facilitates the growth of organized crime with gangs such as the Hell’s Angels who profit.

The Harper government has launched a half-hearted law enforcement crackdown on tobacco smuggling without venturing onto native reserves to shut down the “smoke houses.” A half measure at best. But the reality is it won’t be any more effective than prohibition in the 1920s or the current War on Drugs. When economic activity is pushed underground, the only way to control it is to allow it to come to the surface. This means lowering tobacco taxes and repealing absurd labeling regulations. The greatest threat to teen smoking habits is contraband tobacco. A better balance in regulation needs to be found or the anti-smoking lobby will seriously undermine their own efforts.

The government also needs to come to the realization that we live in a free society and people are allowed to make decisions for themselves. They are allowed to rise and fall on the choices they make. Smokers in this day and age are conscious of the risks they are taking. So instead of treating each of them like they are an ignorant child, simply be there to offer a way out if they want it, or they will flip you the finger and buy a carton of cigarettes for 11 bucks on the underground market. Prohibition didn’t work and neither will a holy war on tobacco. That’s the reality.

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