Turkey’s plain tobacco packaging law takes effect today, reports The Daily Sabah. Manufacturers have until Jan. 5, 2020, to clear branded stock.
The new regulation mandates cigarette manufacturers use a single, standard pack without logos, graphics or similar signs promoting the product. The warnings and photos must take up at least 85 percent of the packaging surface.
The move is part of a broader crackdown on tobacco that started in 2009.
While smoking has been declining in Turkey, consumers still spend $15 billion per year on cigarettes while the government spends $10 billion to treat smoking-related illnesses, according to the Fight Against Smoking Association.
In requiring plain packaging, Turkey joins countries such as Australia, the United Kingdom and Canada.
Christian Hinz and Lisa Esser evaluate the impact of new plain packaging requirements for RYO paper packaging.
By Stefanie Rossel
Christian Hinz
Plain cigarettes packaging has been around for almost eight years now. Recently, Canada and Israel took the concept to a new level, requiring, for the first time, that the packaging of roll-your-own (RYO) papers be marketed only in a standardized design. In both markets, legislators have chosen a drab brown-green color for all packaging and a predetermined typeface for the brand names. Designs or logos aren’t permitted anywhere on the package. Israel also requires a health warning in Hebrew on RYO paper booklets.
Tobacco Reporter spoke with Christian Hinz, managing director, and Lisa Esser, head of corporate affairs and business development, at Gizeh Raucherbedarf, a German manufacturer of RYO and make-your-own (MYO) papers, about the implications of the extended legislative requirements on their business.
Lisa Esser
Founded in 1920, the company has 600 employees and is best known for its brands Gizeh and Mascotte. Gizeh, which is present in more than 80 markets, is the only company in the RYO/MYO papers sector that has its own printing plant as the company puts a lot of emphasis on the sophisticated, appealing packaging of its products.
The state-of-the-art print shop at Gizeh’s headquarters in Gummersbach is equipped with three die cutters to produce the elaborate packaging designs of the company’s products, including the firm’s well-known magnetic lock booklet. Packaging development takes place either in-house or in collaboration with specialized agencies.
Tobacco Reporter: In which of the two countries is it easier for manufacturers to implement the new packaging requirements?
Christian Hinz: Definitely for Canada. Health Canada defined 24 months ago that rolling papers, although they don’t contain any tobacco, are tobacco products. Since Nov. 9, 2019, manufacturers and distributors have not been allowed to produce, sell and distribute noncompliant products and packaging. There is, however, a transitional period of two years. Besides, the new rules have been communicated clearly by the Canadian government.
Israel, by contrast, passed its plain packaging law in January 2019. To make their products compliant, manufacturers to date only have a nonauthorized English translation of the Hebrew legal text, which they received at a very late point. The new legislation will enter into force on Jan. 8, 2020. If any merchandise with noncompliant packaging is found at a shop after that date, both the retailer and the manufacturer will be fined up to €50,000 ($55,137). There is no grace period. We have stopped delivering noncompliant products to Israel as retailers cannot guarantee the complete sell-off by the due date.
What does it mean for your product portfolios in these markets?
Hinz: We are only present with one variant of our rolling papers in Canada, but in Israel, we have been selling three qualities of rolling papers in four versions until now. With standardized packaging, you cannot communicate the differences between the individual variants anymore. Therefore, we will have to reduce our offer in Israel to only one product from January since consumers won’t have a chance to differentiate. This is annoying.
Lisa Esser: We first had the idea to include some explanations inside the booklets, which would have reached consumers after they had bought the product, but even that is not permitted, which is incomprehensible to me.
Which implications do regulations like these have on the overall market?
Esser: It will lead to the multinationals taking over an ever-greater share of the market as already is the case in the foodstuff industry. As a result, the selection of different products will decrease. Transferred to tobacco products in, for example, Israel, it means that manufacturers who until now had, let’s say, 20 different products on the market will drastically reduce their portfolio because it’s not economically viable to offer so many variants.
Price will become the only determinant for retail sales figures. This might lead to the formation of an oligopoly that goes straight down the supply chain. Only those manufacturers that can sell their products at a low price and also have a functioning distribution system will be successful.
What about the consumer?
Hinz: The consumer won’t have much of a choice anymore. It is, in a way, an incapacitation of the consumer. We expect a slow process in which the consumer starts to downtrade, following the argument that if there is no difference between the products on offer anymore, they could also buy the cheapest one. The entire process will lead to a deterioration of product quality in the market—at the expense of the consumer.
What do these plain packaging laws mean for you as a manufacturer?
Esser: It’s basically an expropriation of the brand owner as it deprives manufacturers of their intellectual property rights. I still cannot comprehend how constitutional states can permit such regulation. There’s a whole range of implications: We cannot communicate innovations to consumers anymore. It also won’t be possible to launch a small volume of a new product that has proven successful in another country to test it in such a market.
We will probably have to restrict our geographical radius of market activities if there was a domino effect of plain packaging being extended to rolling papers in more markets. There would definitely be a limitation of our product portfolio in countries with plain packaging and/or warning requirements. In the worst case, we would have to launch a dedicated plain packaging variant for each country—just think of the individual health warnings required in the national languages. We expect each market to develop its own standards for such regulation. This would imply a strong individualization and customization of our products, restrict our portfolio, lead to smaller volumes and higher cost.
What effects do you expect the measures to have on counterfeiting?
Hinz: The black market for rolling papers is likely to thrive under such conditions, similar to what happened to the cigarette markets in countries that introduced standardized packaging. This is disadvantageous for all stakeholders in a market. Legislation doesn’t take issues like that into account at all. Forging of rolling papers already is a big problem, but currently the hurdles are high for counterfeiters—if you as a manufacturer continuously launch paper and packaging innovations, counterfeiters’ work gets more difficult. Lawmakers implementing plain packaging lower that hurdle considerably.
How large are the Canadian and the Israeli markets for rolling papers, and what developments do you anticipate for your business following the introduction of plain packaging for RYO paper products?
Esser: The legislative changes in both countries have quite an impact on our business. It’s still too early to say how the situation will develop, though. Assessing the true market size for rolling papers in Canada is very difficult because most of the tobacco cultivation for RYO and MYO takes place in the Native American reservations between Canada and the U.S., which are exempt from taxation. The latter is the basis for a determination of market sizes. In Israel, evaluation of the market is similarly difficult.
What’s your view of current regulation of tobacco products in general?
Hinz: Principally, we have to deal with a lot of poorly crafted regulation today. Take Belgium and France as an example where legislation demands that cigarette paper needs to be matte white. What did lawmakers want to say? Cigarette paper is not permitted to come in colors. If you look at unbleached paper, though, it is gray. Legislative statements like this create uncertainty instead of clarity.
The extended period to comment on the U.S. Food and Drug Administration’s (FDA) proposals for graphic health warnings ends today.
The 2009 Family Smoking Prevention and Tobacco Control Act (TCA) directed the FDA to issue regulations requiring that cigarette packages and advertisements include new health warnings with text statements and color graphics depicting the negative health consequences of smoking.
The original regulations published by the FDA in 2011 were challenged in court by several tobacco companies and vacated in August 2012 on First Amendment grounds.
The agency has since reworked its proposed warnings and FDA officials think the current draft regulation and revamped photos will stand up to further First Amendment challenges.
“The FDA believes the proposed warnings would survive judicial scrutiny because they advance the substantial government interest of promoting greater public understanding of the negative health consequences of smoking and are factual, accurate, and not unduly burdensome,” an agency representative told MedicineNet in an e-mail message.
Following a lawsuit by public health groups, a judge in March directed the FDA to publish the proposed rule by August 2019 and issue a final rule in March 2020. The warnings would be required to appear on packages and in advertisements 15 months after a final rule is issued, which means U.S. smokers could be looking at graphic health warnings in 2021.
As of Nov. 27., the FDA had received 288 comments to its proposed rule on graphic health warnings.
The World Health Organization Framework Convention for Tobacco Control Protocol to Eliminate Illicit Trade in Tobacco Products came into force in September 2018 and aims to minimize the volume of illicit tobacco products smuggled across borders.
By making tobacco products more accessible and affordable, illicit trade negatively affects public health and healthcare expenditure, according to the FCA.
Among other requirements, the protocol calls for the creation of a cross-border tracking and tracing system for tobacco products.
The guidebook provides an overview and historical context of the protocol and offers guidance on how policymakers can choose an appropriate track-and-trace system for their jurisdiction.
Source: Framework Convention on Tobacco Control
Tobacco associations in Indonesia have cautioned that the health ministry’s plan to increase the size of mandatory health warnings to 90 percent of a cigarette pack will adversely affect workers throughout the supply chain, reports Tempo.
“For the past five years, there have been more than 90,000 factory workers who were laid off,” said Muhaimin Moeftie, chairman of the Indonesian Light Cigarette Producers Association.
Between 2007 and 2019, the number of tobacco producers in Indonesia declined from 4,000 to 700, according to Moeftie, whose concerns where echoed by the Indonesian Cigarette Industry Community Forums and Cigarette Producers Association.
The associations said that increasing the size of the warning on a cigarette pack would threaten the sustainability of the industry and the income of 6 million people.
Independent tobacco dealer NewCo recently started to dispatch its leaf samples in biodegradable, pesticide-free cotton bags, rather than in traditional plastic bags.
Rainer Busch, the company’s principal, said that the move away from plastic is part of NewCo’s growing effort to provide for a sustainable future.
The printed, cotton bags are considerably more expensive than are plastic bags, though, as Busch points out, their extra cost is irrelevant when set against the cost of sample consignments and, especially, against the positive contribution the bags will make to the protection of the environment.
The first batch of 2,000 cotton bags, comprising 1,000 bags in each of two sizes, were received earlier this week at NewCo’s offices in Friedberg, Germany. They will be used for the dispatch of all samples unless a client insists on the use of plastic bags, something Busch believes is unlikely.
In another change, NewCo will dispatch scraps and DIET tobaccos in carton boxes rather than in hard plastic boxes or plastic bags.
With about 1,000-1,500 sample bags expected to be dispatched by NewCo during the next 12 months, the positive impact on the environment will not be huge, but, as Busch says: “Each of us can do something to help—we can stop using plastic bottles, use bicycles and public transport, and buy food fresh from the city market instead of at the supermarket”.
The new bags will be on display at NewCo’s stand at the TABEXPO exhibition due to be held at the RAI Exhibition and Convention Centre, Amsterdam, the Netherlands, on Nov. 12-14.
Canada’s plain packaging law will take effect on Nov. 9.
All packaging will feature the same brown base color, basic gray text and minimalist layout under the new requirements. The measure will also standardize the size and appearance of cigarettes, cigars and other products inside the packages.
Tobacco companies will have 90 days to offload their branded inventory.
In 2021, slide-and-shell packages will become mandatory in Canada, providing a wider surface area that will display the largest health warnings in the world, he said.
“The package designs [are] really amazingly glitzy and very attractive, especially to kids,” said University of Waterloo psychology professor Geoffrey Fong, the founder and chief principal investigator of the International Tobacco Control Policy Evaluation Project.
“What we’ve found is that plain packaging has tremendous effects on reducing the appeal of these deadly products.”
Eric Gagnon, head of regulatory affairs at Imperial Tobacco Canada, said plain packaging would boost the illicit sale of tobacco products while disrupting the tobacco supply chain.
“It’s not like you just turn a key on and off,” he said. “You need to change all your artwork, all your equipment, retool all your machines, so obviously, it’s very costly and a very complex operation.”
Tobacco companies have been undermining U.K. plain packaging laws with subtle marketing techniques, according to a report published in BMJ Open. The techniques ensure cigarettes continue to stand out from rival products without breaching regulations.
Philip Morris International, for example, added beveled edges and a new “pro-seal” closing mechanism to packets of its bestselling Marlboro brand. This made packs “appear more premium and recognizable compared to other brands,” the researchers claimed.
Tobacco companies have also responded to a ban on taste descriptors by replacing them with names based on color. The researchers said that banning terms such as “smooth” and “light” was meant to dispel the myth that certain types of cigarette are less dangerous but that by teaching customers color codes linked to the old descriptions, “misperceptions are likely to endure.”
One of the lawmakers who pioneered the legislation said ministers should consider tightening up the rules to eliminate loopholes detailed in the report.
Starting next year, the Philippines will require alternative smoking devices to carry graphic health warnings similar to those printed on conventional cigarette packages.
Anton Javier, project manager for product research and standards development at the Food and Drug Administration (FDA), said the law mandates the printing of graphic health warnings on the packaging of vapor products and heated-tobacco products (HTPs).
While vapor products are regulated by the FDA, HTPs are under the jurisdiction of the Inter-Agency Committee for Tobacco.
An astonishing share of cigarette packages are printed and converted on the machines of a single supplier.
By George Gay
If I were asked to list suppliers of tobacco machinery, Bobst would not be one of them. And in a way, this is odd because, as Alfred Ulli, Bobst’s marketing and sales director, told me during a telephone interview in August, if you pull a cigarette from a pack, there is an 80 percent chance that the blank from which the pack was formed was printed and converted on a Bobst machine. Most of Bobst’s Lemanic tobacco industry-focused machinery is used for producing hinge-lid blanks, but some of its other machinery is used for producing other types of tobacco packaging along with printed tipping papers, inner frames and inner liners.
It is also the case that roughly 80 percent of the Bobst Lemanic presses used by printers and converters for producing tobacco industry materials is used only for such purposes while just 20 percent is also used for producing materials for packing the products of other industries.
Clearly, while Bobst might not be a tobacco industry machinery supplier in the strictest sense, it is a vital contributor to the industry’s supply chain. For all sorts of reasons, tobacco products may not be sold without first packing them.
Of course, there are several reasons why Bobst’s printing and converting machinery cannot be seen to fit within the tobacco industry fold, not the least of which is scale. Such machinery is at least 40 meters in length, for instance. Bobst’s Lemanic lines usually run 24 hours a day, seven days a week, and the users invariably employ Bobst trained operators and maintenance crews to keep them running efficiently.
This focus on training is unsurprising. Bobst offers a complete range of dedicated tobacco industry machinery, including, basically, two models of presses: a high-productivity machine for high-volume brands such as Marlboro and what it calls a medium-productivity machine with production levels about half those of the bigger machine. But each machine is custom-made to the user’s specifications; if you could see 100 machines, you would be looking at 100 different configurations.
Asked what proportion of a machinery supplier’s business with the printing and converting industry would be accounted for by parts and services, Ulli estimated a maximum of one-third. In part, this would be because the printing and converting industry has a parallel supply chain for what it refers to as “tooling.” Tooling parts, such as printing cylinders and cutting forms, tends to be the preserve of local suppliers not press suppliers such as Bobst.
Nevertheless, Bobst provides parts and services in a number of ways, one of which is a simple reactive service that can employ remote diagnostics and that delivers parts and, if needed, technicians when required. But in order to prevent nonscheduled production stops, Bobst offers preventative maintenance programs: half yearly or yearly inspections during which its technicians identify worn parts so they can be replaced before they fail. And yes, it will provide tooling parts as required for each job as well.
On the other hand, Bobst offers training and instruction for machinery users’ own maintenance personnel so they can carry out regular and preventive maintenance, and it provides training for press operators and managers.
As part of its maintenance scheme, Bobst runs an obsolescence program in which it regularly informs customers about parts that are no longer available on the market and offers replacements with an equivalent performance. These are mostly electric or electronic parts that Bobst does not make itself.
Finally, it offers an upgrade program under which it will provide machine adaptations in line with new requirements, depending on the age of the machine and the changes required. Ulli gave as an interesting example the changes that had to be made to some machinery so that it could produce the new types of packaging required by the arrival of heat-not-burn products to the market.
So what does the future hold for tobacco packaging requirements? Ulli made no bones about the fact that the years of volume growth, stretching from the 1970s to the early years of the new millennium, are over. Cigarette consumption simply isn’t growing. “At the same time, tobacco consumption is changing with ever new and more and more sophisticated packaging as well as new types of products,” he said. “What is new—and this is just the beginning—is that the brand owners are forced by consumers to come out with new products. There is a new market approach, which will require new designs, new boxes and all with faster time-to-market requirements. The tobacco industry will continue to develop, and Bobst will remain a supplier of choice.”
