Update: We wrote in July that the the federal government was open to public consultation regarding proposed plain packaging changes. Unfortunately for OCSA members and other small retailers, the government has decided to proceed with the changes despite the potential risk that they pose to businesses.
As outlined below, the federal government believes that plain packaging will curb tobacco consumption among youth but there could be drawbacks that the government analysis didn’t consider.
The OCSA is concerned that plain packaging could encourage larger scale production of contraband tobacco, an issue that we already have to deal with on a daily basis.
Read more about our concerns below.
July 16: While Canada has already implemented most of the internationally recognized best practices for curbing tobacco usage, many of the users who continue to smoke began doing so in adolescence.
A recent Health Canada study lays out how product packaging targets and influences youths while making the case for plain packaging as a means of curbing that trend.
The comprehensive report finds that Australia saw a noticeable decrease in tobacco consumption during a three-year span in which they adopted plain packaging protocols. Now Canada will join Australia and 13 other countries around the world in doing so.
An explanation of the rationale behind the decision, as well as what the plain packaging regulations will look like, can be found at the Government of Canada website.
Note that, as things stand, any regulation changes would come into effect six months after they are finalized, at that point allowing a three-month window for retailers to adjust inventories and educate their staffs and customers.
From a retailer’s perspective, however, there are some concerns with the launch of plain packaging initiatives. Some OCSA members are very concerned that the government of Canada has not considered the issues plain packaging creates around selling this legal product:
- Encouraging a larger illegal production market on aboriginal reserves (already 37%) by dictating sliding shell packaging (all illegal factories only use old machinery)
- Speed of service will be greatly affected as all brands look alike with over 100 SKU’s in each store.
- Cost of receiving orders, replenishment of stock, counting of inventory (time issues)
- Employee training and retention with a 60% turnover with tobacco being our largest category.
- Safety and security of staff who will no doubt have their back turned to customers for extended periods of time.
- Business adjustment time requirements (1 year) for customer retention and education required so they don’t end up in a confused black market.
If OCSA members agree with any of the above they are reminded to reach out to their local MPs to express their concerns. Consultation is presently open for all.