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On the Nation: Plain Packaging Debate

On the Nation: Plain Packaging Debate

Imperial Tobacco leaves open possibility of law suit against New Zealand government if plain packaging is introduced, as planned. Says it’s a “last resort” but “of course we will defend the right to use our brands”.

Fox defends government’s right to interfere with tobacco company’s intellectual property: “Because we are trying to save the lives of our people” and save billions from the health budget.

Maori Party co-leader accuses Tobacco company spokesman of being “a peddler of death” and walks off set.

Tobacco company promises to pull its own product from any dairies selling to children: “The first time they pay a fine, the second time they pay a higher fine, the third time we pull. Of course we do”.

Fox says Australian government data shows a 14 percent drop in smoking since plain packaging, but Geitz long-term smoking trends there are stable.

Tobacco spokesman says coming down too hard on the industry will drive smokers towards criminal suppliers, “Of course they have the cheapest product. The other thing, however, is that they sell to children”

NZ customs and police told The Nation there is no problem with a blackmarket in tobacco in New Zealand, but Gietz warns plain packaging could grow one: “There was never any organised crime involved in the situation in Australia before the introduction of plain packaging”

Geitz: So as long as consumers want a perfectly legal product, fully knowing what it may or may not do to their health, there’s no reason why they shouldn’t be able to buy and enjoy it.

Fox: “...for the last 27 years – 27 years – I have not attended a funeral of someone in our family, and I’ve attended numerous funerals, who has died of natural causes… you and your companies are addicting people to cigarettes and telling us that it’s their free choice and that’s fine, ‘We’re going to profit off the death of your people.’

Lisa Owen: But now it’s perfectly legal, yet it kills 5000 Kiwis a year. That’s why the Maori Party wants smoking in this country stubbed out by 2025. Right now the government’s calling for public submissions on its plans to introduce plain-pack cigarettes this year. The same move in Australia resulted in a legal throwdown with Big Tobacco but claims it does nothing to stop people lighting up. So who’s right? Well, joining me now to debate the issue is Maori Party co-leader Marama Fox and Imperial Tobacco’s corporate affairs director Axel Gietz, who has travelled from the UK specially to be on the show this morning. Welcome to you both. If I can start with you, Mr Gietz. Smoking kills around six million people around the globe a year. So to kick things off, is it a good thing to smoke?

Axel Gietz: Look, the fact that smoking leads to diseases has been known for more than 50 years. We’ve been printing health warnings in this country on our packs since 1973. You will not find one person on the streets of Auckland who won’t tell you it’s bad for you.

I’m asking you, is it bad for you? And is it a good thing to smoke?

Gietz: People make choices. 17% of the adult population in this country choose to smoke. That’s a fact. It’s also a fact that 70% of the price of a packet of cigarettes is taxes. We don’t sell tobacco. We sell taxes. So as long as consumers want a perfectly legal product, fully knowing what it may or may not do to their health, there’s no reason why they shouldn’t be able to buy and enjoy it.

Marama Fox: Mr Gietz, you say that you print health warnings on the packages, but not by choice. You print them on there because we have forced you to do that under government regulation. The tobacco company didn’t come out and go, ‘Oh my goodness, my public service to the nation is to tell you that this is bad for you.’ You fought tooth and nail to not put warnings on to packaging, and you fight tooth and nail to resist every measure that governments have the sovereign right to put in their countries.

Gietz: We are not for one moment disputing the sovereign right of governments, of lawmakers, as parliamentarians are called.

Fox: Well, that’s not true. You do dispute it. You’ve joined the fight in Australia to take the Australian government to court. So you do dispute it. You’ve threatened the UK government that you may yet sue them. You’ve threatened our government that you may yet sue us.

Gietz: If I may, first of all, I think we all want laws that are intelligent, that are based on all the available evidence and that actually work.

Fox: That protect the health of our people.

Gietz: We perfectly support public health agendas. The point is – do the laws work, or do they not work?

Fox: Surely that’s hypocritical. You support public health agendas, and yet you peddle sticks of death to our people. Because that’s what they are. Let’s be clear. We’ve got 500,000 people in New Zealand who smoke. Half of them will die. Half of them will be sick. So you support public health? Surely that’s hypocritical.

Gietz: It’s not hypocritical at all. It’s a legal product consumed by 17% of your adult population.

Fox: That kills our people.

Mrs Fox, Mr Gietz is basically saying it’s free choice; you can choose. People don’t force you to smoke a cigarette, you make that choice.

Fox: And once you do, you are addicted. And they know that. The addiction is what continues our people to smoke. I ask our families who bury their members of their… their grandparents and their mothers and their fathers in the grounds every year, ‘Why do you still smoke?’ They are addicted. They don’t want their children to smoke. They don’t want their children to rise up and do the same dumb things and the dumb choices that they have made that have seen that they are now addicted. It is a lifelong addiction that we try to change.

Mr Gietz, what do you say to the families of those people that Marama Fox is talking about?

Gietz: Can I just address this that was said just now? There are more former smokers in the world today than current smokers. What you call addiction is a fact.

Fox: Because we are trying to help them do that.

Gietz: It is hard to give up.

Fox: That’s right.

Gietz: And every smoker has a certain threshold at which he or she is able to give up smoking. This is not the issue. The issue is that people choose to smoke.

Fox: No, it is the issue.

Gietz: And if they do so, as I said before, everybody at one point in their lives may find a reason why they want to stop. There are more former smokers than current smokers.

Fox: And there are more smokers of cigarettes who are buried in the ground. Look, for the last 27 years – 27 years – I have not attended a funeral of someone in our family, and I’ve attended numerous funerals, who has died of natural causes. We have the highest rates in the world of Maori women of COPD. We have the highest rates in New Zealand for SIDS, for diabetes, for all these cancers, and they are putting our people in the graveyard, and you and your companies are addicting people to cigarettes and telling us that it’s their free choice and that’s fine, ‘We’re going to profit off the death of your people.’

Mr Gietz, can I go back to my original question? What do you say to those families that Marama Fox is talking about – the ones who are burying their loved ones?

Gietz: Look, every kind of human suffering is tragic. There’s no doubt about that.

Fox: But you profit from it.

Gietz: We sell a product that creates diseases in smokers – not in every smoker. It’s on our website. Everybody knows it, but people still want to consume it.

Fox: And you still want to improve your profit margins, which is why you threaten to sue governments who have the sovereign right to make legislation to introduce things like plain packaging.

Gietz: Can I just address this, if I may? Because something comes into play here, which is our intellectual property. In our line of business, we have three types of assets. We have our people, we have our factories, and we have our brands. We spend a lot of time and effort and money to build these brands. We’re a fast-moving consumer-goods industry, so we cannot just sit back when one of these three key assets is taken away from us. Of course we will defend the right to use our brands. We own them.

Mr Gietz, will you defend that right in New Zealand? If we go ahead with plain packaging, are you going to take us to court as well?

Gietz: Well, let’s cross that bridge when we get there. For the moment, we’re discussing whether this law…

Fox: You have already threatened to take us to court.

Gietz: I have not. Whether this law is actually, as I said before, evidence based, intelligent and will work. And I am grateful…

Fox: In 2014, you threatened this government—

We’ll come to that in a minute, but I just want a clear answer to this. If we go ahead with plain packaging, can you rule out taking legal action against New Zealand?

Gietz: Of course I cannot rule anything out. As I said before, it’s our intellectual property. But any kind of lawsuit is always the last resort. Why do you think I’m here now? And I’m grateful for the opportunity to contribute to the debate in public, to give our expertise to the decision-making process. Nobody will ever know more about our business than we do. We just want to make this contribution.

Mrs Fox, the point about intellectual property — this is a perfectly legal business. Why do you think we’ve got the right as a country to take that away from a perfectly legal business?

Fox: Because we are trying to save the lives of our people. We are trying to protect our children from growing up as orphans when their parents and their grandparents are buried in the ground, when we spend millions and millions of dollars, in fact, billions of dollars, in the health system trying to battle issues that are caused by smoking – smoking-related illnesses.

So I’m wondering where the line in the sand is, then. So do you go to KFC and McDonalds and Coca-Cola and say, ‘You too must have plain packaging because we’ve got an epidemic of diabetes and obesity.’

Fox: That’s right, and we have already come out and said that…

Where’s the line?

Fox: …we would like to introduce the sugar tax. We need to help and assist our nation grow healthy people. In fact, it’s about raising a generation of young people who do not have to in their adulthood make a choice of whether to give up. We want a smoke-free generation.

You would make KFC and McDonalds and Coke plain-pack as well if you could?

Fox: What I would like to do is to see the health of our people improved, and if that means excise tax on sugar, then we are fully prepared to do that. In fact, we would like to see that introduced. We introduced in New Zealand— actually, the Maori Party introduced hiding the cigarette advertising, putting the counters so our children could not see cigarettes being sold next to lollies.

Okay, well, let’s get to the heart of this. Does it work, Mr Gietz? Does it work to go to plain packaging? Does it discourage people from smoking? Does it make them give up?

Gietz: Well, we have one real-life example, which is Australia, that introduced plain packaging in December 2012. Now, Australia, being the pioneer, went through a process where a lot of people at certain points spoke of unintended consequences.

Fox: Mm-hm.

Gietz: ‘Oh, we didn’t realise this would happen,’ and I’m going to come onto these now. In the case of New Zealand, we would be speaking about foreseeable outcomes, because we have the experience from Australia. What’s happened in Australia? In Australia long-term consumption trends which are going down have not been impacted at all. It’s the same graph. It doesn’t fall off a cliff following December 2012.

Fox: Well, that’s not what the Australians show us.

Gietz: That’s number one.

Fox: They tell us that it’s dropped by 14% since the introduction of plain packaging.

Gietz: Well, I am quoting official government statistics.

Fox: And so am I.

Gietz: That’s all I can do. The second thing is that this was meant to primarily – primarily – fight underage smoking. Now, nobody wants people under the age of 18 to smoke. That’s for sure. But the question is – why do they start smoking?

Fox: Wait on.

Gietz: There are many many studies from around the globe that investigate what is it that triggers this interest in that first cigarette. Packaging doesn’t feature. What we’ve seen, however, is a growth in underage smoking by 30% in Australia since December 2012—


Gietz: And if I may just finish, because there’s a cause and link here, we have also seen an increase in illicit trade in tobacco products…

Fox: In Australia?

Gietz: …by almost the same percent in Australia, absolutely.

We’ll come to the black market issues a bit later, but I just want to talk to you about the evidence that you’re producing there. An independent study that was commissioned by the Australian government says that it did lower the number of people smoking – 100,000 fewer people smoking as a result of plain packaging. That’s got to be good, hasn’t it?

Gietz: Long-term trends are stable, and you must not forget one other element in Australia, which is also already in place in this country. Australia in parallel to the introduction of plain packaging introduced annual tax hikes of 12.5% increases—

They did, but the research, Mr Gietz—

Gietz: What contributes what when even the long-term trends—

No, no, the research, Mr Gietz, took that into account.

Gietz: Even under these draconic circumstances—

Fox: Draconic?

Gietz: Draconic. Of course it’s draconic.

Fox: Are you kidding me? Look, you’re a doctor, and that seems to give you some sort of credibility when you work for Imperial Tobacco, but Dr Goebbels was also a doctor. And what I say to you is you are a doctor of death. You are peddling death and destruction and misery on our people.

All right, let’s keep to the topic at hand. So Mr Gietz is saying that it doesn’t work at all, it doesn’t discourage underage smokers at all.

Fox: That’s not true at all. Of course it discourages underage smokers. Why would Imperial Tobacco pay exorbitant prices to have their brands free right behind the counter, right next to the lollies in a shop? Why do you need to put them there? We had to get legislation into this country to hide that from our children. So if Imperial Tobacco thought that they were not peddling their brand of death to our young people, then they would not be fighting so hard to ensure that they can continue to profit off our death.

Isn’t that the biggest proof that it is working, because you are spending so much money trying to stop it? Big Tobacco is.

Gietz: No, of course we’re trying to stop it. I explained to you before, and I’m going through it in more detail now. Why do we need our brands? We need our brands to compete with other manufacturers in our industry sector. If the brands are taken away from us and the consumer can only go by price – we can only compete over price. What happens, and any economist will tell you that, is that there’s a downwards spiral. That’s what it’s called – downtrading.

Fox: But all tobacco companies—

Gietz: People go for the ever-cheaper—

Fox: All tobacco companies have the same—

Let him finish, Mrs Fox.

Gietz: Let me finish my sentence...

Let him finish.

Gietz: And my line of thought here. Ever-cheaper products are sought by consumers if price is the only point that we can compete on. Now let me tell you one thing. The cheapest product will always be peddled by the criminals because they don’t collect taxes for the government. Of course they have the cheapest product. The other thing, however, is that they sell to children, and that’s where the causal link comes into it. Cigarettes become more accessible and more affordable and therefore underage smoking has risen.

Fox: All right, can you answer a question.

Gietz: It’s as simple as that.

Fox: But here is a question, then. If you know and we can prove that a dairy in West Auckland is selling cigarettes to children illegally, will you remove your cigarettes from those shops?

Gietz: We will absolutely totally support any penalties for retailers that are caught selling to underage people.

Fox: But will Imperial Tobacco, knowing that—

Gietz: Of course we will. Of course we will.

Fox: So you would remove your products from the shops that can be proven to have been selling cigarettes to children?

Gietz: There must be degrees of penalties which should be enshrined in law, so as—

Fox: But if you don’t want them sold to children, you could pull them yourself.

Gietz: The first time they pay a fine, the second time they pay a higher fine, the third time we pull. Of course we do. We support any measures that are effective in fighting underage smoking.

Fox: What self-imposed measures have you got that will take cigarettes out of the hands of children where storekeepers are known to be selling them to those children?

Gietz: Well, let me repeat myself. Any—

Fox: Self-imposed.

Gietz: Any storekeeper that is caught selling these must be penalised, and this should be part of an intelligent law that works. The criminals, however, will never be penalised. They will sell—

Fox: Where’s your evidence in New Zealand of criminal behaviour in the black market selling of cigarettes?

Gietz: We are currently— Well, black market is always criminal and illegal by definition.

Fox: In New Zealand?

Gietz: We are currently talking about the experience in Australia and about the fact that—

Do you have any evidence relating to New Zealand, Mr Gietz, because the customs department and the police say there’s no indication of organised crime being involved in the illicit tobacco trade here.

Gietz: Yet.. Australia is an isolated continent with a lot of blue water around it. They never needed it. Yeah, they never needed to fight this. It didn’t exist. Last October the Australian Minister for Immigration and Protection of Borders announced with great fanfare that he was putting in place for the first time in history a special task force dedicated to nothing else but fighting, as you call them, the organised crime syndicates—

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