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Small Businesses set to suffer from tobacco regs


Small Businesses set to suffer from new tobacco regulations

Thousands of New Zealand’s small business operators are set to suffer significant financial downturn and job cuts, as new rules come into force today which ban smoking in public places and severely restrict the display of tobacco products in retail outlets.

According to Imperial Tobacco New Zealand (ITNZ), the new measures under the Smoke-Free Legislation will potentially have a devastating effect on the community, yet will not deliver the desired impact on smoking consumption and prevalence.

“Consumption and the number of people smoking in New Zealand has been decreasing for years and will continue to do so, as current regulations work and work well,” ITNZ’s Corporate Affairs Manager, Pat Wylie, said.

“We do accept and support sensible regulations that are backed up by solid evidence and consider the wide range of impacts that they have on the community.

“However these new measures, and other proposed measures such as pictorial health warnings, are only supported by misinformation perpetuated by the anti-tobacco lobby and will not deliver any positive outcomes.

“For example, the only results that we have seen in jurisdictions where smoking bans in licensed premises have been enforced are job cuts, reduced revenues for small businesses and economic downturn.”

- In Ireland, where smoking bans were introduced earlier this year, Dublin pubs have experienced a 16 per cent drop in revenue and 14 per cent drop in employment.

- In Australia, gaming and entertainment group Tattersalls has seen a AUD$1.8 billion decrease of revenue since smoking bans were introduced in Victoria.

- New York has experienced a $71.5 million drop in gross state product and over 10 per cent of the total workforce has been shed in bars and taverns since smoking bans were introduced a year ago.

Ms Wylie said the regulations that restrict retailers from displaying any more than 100 facings, would also have enormous consequences for those who have invested so much to run their own small family diary.

“The display restrictions will rob small retailers of sales and tobacco display revenues, and impose increased costs through compliance which could lead to job losses and possibly force some stores out of business,” she said.

“These restrictions will also stifle fair competition and give encouragement to the illegal market.

“We recognise the Government’s different objectives, but also believe we need to maintain some freedom to sell what is a legal product and ensure that those adults who choose to smoke can continue to do so without being stigmatised.

“We hope that future decision making by the New Zealand Government in regards to regulation of tobacco is properly considered and is not made on the run to pander to the small minority whose objective is to destroy a legal product no matter what negative impacts that might have on the community.”

About ITNZ: ITNZ entered the New Zealand market in 1999 as a result of the New Zealand Commerce Commission’s wish to maintain competition. At that time, the Commerce Commission was concerned that the proposed global merger between British American Tobacco (BAT) and Rothmans could substantially lessen competition in the New Zealand cigarette market. This resulted in Imperial Tobacco Group PLC establishing ITNZ and paying the merged company, BAT, for a portfolio of tobacco trademarks. As a result of ITNZ’s entry into the New Zealand market, the company now employs 155 staff and has a factory in Petone that manufactures for the local market, and also contract manufactures for Imperial Tobacco Australia generating a significant inflow of revenue. At the same time ITNZ contributes more than $175 million to the Government, including approximately $174 million in excise revenue.

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