MIKE RIDGWAY PLAIN PACKAGING SOFIA - BULGARIA PRESENTATION MAY 2018

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1 Consumer Packaging Manufacturers Alliance MIKE RIDGWAY PLAIN PACKAGING SOFIA - BULGARIA PRESENTATION MAY

2 BACKGROUND REMINDER CPMA formed in 2013 to act as a spokesperson for the packaging industry to counter the arguments against regulatory trends. Communication via written articles; TV and radio media putting the case for the packaging industry. CPMA not against regulation which is effective but against regulation which is excessive, disproportionate and ineffective. 2

3 Plain Packaging 3

4 ROLE OF PACKAGING Packaging as a Barrier to Trade in Counterfeit and Illicit Goods Packaging complexity Specialist processes Design variety Controlled supply chain Repro Material Control of Packaging Waste Standardised Plain Packaging or Generic Packaging Examples Australia United Kingdom 4

5 PLAIN PACKAGING WHERE? Australia First December 2012 France full implementation 2017 Ireland full implementation October 2017 Hungary implemented 20 th May 2018 Slovenia implemented 2017/2018 But - Germany holding the line within EU U.K. Full implementation plus TPD-2 Plain Pack Day 20 th May 2017 Regulations on 10g pack size/r-y-o 30 g weight Causing chaos at the retail outlets staff confusion Frustration by customers! EU Within the European Union the TPD implemented but not Plain Packaging left to Member States 5

6 PLAIN PACKAGING 6

7 PLAIN PACKAGING 7

8 PLAIN PACKAGING 8

9 BRANDED PACKAGING 9

10 BRANDED PACKAGING 10

11 PLAIN UNBRANDED PACKAGING 11

12 MANUFACTURING FEATURES Design Variety Pack Construction Security Features Value of Branding 12

13 Barrier to the Illicit Trade ROLE OF PACKAGING Brochure/handout explains manufacturing processes and complexities Design Pack Construction Variety Security Features Value of Branding Adverse Consequences of Plain Packaging Health illegal supply chain Reduced Economic Activity Boost to Illicit Trade See Press Articles smuggling and counterfeiting Everyday Occurrences London, Midlands, North of England Australia illegal Tobacco Crops 13

14 PACKAGING MANUFACTURING FEATURES Pack Complexity - gravure printing/capital intensive reel to reel technology Design Variety - sku reduction Design Evolution - Lambert & Butler Specialist Manufacturing Processes - metallic substrates; finishes; embossing; hot foil stamping; vignettes Branding Reinforces Consumer Preference for Genuine Products 14

15 DESIGN VARIETY 15

16 DESIGN CHANGES 16

17 WHAT COMES NEXT? EUROPE EU Harmonisation threats in the future? Re-opening of TPD-2 Proposals from EU Commission Separate Legal Act Political Momentum Additional Regulations REST OF WORLD Over 110 countries with pictorial health warning Africa 8 Americas 18 Mid East/Eastern Med 13 South East Asia 7 Western Pacific 19 Europe

18 ADVERSE CONSEQUENCES Reduced Economic Activity Manufacturing Reductions Factory Closures Health Risk distribution control Boost to Illicit Trade Contraband Counterfeit Elimination of Brand Intellectual Property 18

19 WHERE NEXT at various stages New Zealand Singapore * UAE (Bahrain) Hong Kong Ukraine Norway Canada Uruguay Thailand Belgium Romania Barbados Turkey * Finland Chile South Africa * The Gambia Mauritius Kenya Botswana Brazil Taiwan Georgia Nepal Malaysia Sri Lanka Congo Tonga Ecuador Lithuania Nigeria Channel Islands BUT THREE PIVOTAL COUNTRIES * 19

20 OTHER MARKET SECTORS Slippery Slope getting steeper!! Alcohol PH England wants Plain Packaging Politicians want health warning labels Health warnings on snack foods Confectionery free aisles in supermarkets Call for less glitzy packaging for sweets Plain Packaging for soft drinks in New Zealand Breakfast Cereals in Australia in Plain Packaging? Paying For Fuel at Pump? 20

21 OTHER PACKAGING PRODUCTS 21

22 ILLICIT TRADE GLOBAL STATUS 480 billion cigarettes sold illegally every year Governments tax losses - estimated $35/$40 billion annually Approx. 9% of EU consumption is illicit amounting to 47 billion cigarettes (counterfeit and contraband) Counterfeit is increasing UK seizures PACKAGING COMBATS THE COUNTERFEITER BUT PLAIN PACKAGING ASSISTS THE COUNTERFEITER Source : BAT 22

23 PLAIN PACKAGING World Wide Trends Increasingly looking to Europe Recent visits/contacts with Singapore; Hong Kong; UAE; Ukraine and The Gambia confirmed this position Additional Consequences of Plain Packaging Withdrawal of manufacturing Australia; UK; Germany; Netherlands Closure of packaging plants 3 in UK; Australia; Malaysia Others reduction in labour Reduction in marketing/design activity Countries need to recognise the impact e.g. Turkey; South Africa; Singapore pivotal locations 23

24 PLAIN PACKAGING Consequences In addition to withdrawal of manufacturing other consequences include Elimination of engineering support services Reduction in marketing/design activity London particularly affected as World centre for design creativity Financial Times Quotation See Summary slide later 24

25 Tobacco s role as testbed for regulation is clear

26 Health Lobby Sights Plain Alcohol Packs Judith Mackay, adviser to WHO fought against tobacco regulation in Asia stated a packaging change would help de-normalise excessive drinking. The CPMA response.. There is no evidence that packaging plays a part in any consumer choice or decision at the point of purchase.

27 Is Plain the Future? Focus Alcoholic Drinks Public Health England (PHE) are pressing for larger health warnings and also plain packaging.. Some MP s are demanding more regulation. CPMA response.. The drinks industry have been warned that they should take the trend for extra regulation seriously.. Tobacco may have been considered special the damage switching to plain packs would reduce support for the internationally recognised brands.

28 28

29 29

30 Label Warnings on Sweets Leave Sour Taste The British Medical Association aided by the Dentists and PHE.. Want to introduce warnings onto sweets by introducing tobacco style labels and less glitzy packaging with supermarkets under pressure to introduce confectionery free check-outs. CPMA response.. Brand owners should voice concerns about lack of consumer choice and need for education relating into eating habits rather than restrictions on the packaging where no evidence exists of its effectiveness.

31 PLAIN LABELLED PRODUCTS

32 FINANCIAL TIMES FEBRUARY 2017 BIG TOBACCO SETS STAGE FOR ALCOHOL TO DEFEND BRANDS. The Consumer Packaging Manufacturers Alliance argues that Plain Packaging on alcohol would curtail an area of brand design and development in which the UK is a world specialist at a time when brands need to be protected and intellectual property rights maintained in the globalised trading environment. Financial Times February

33 IMPACT ON RETAILERS Reduced shop footfall Time taken at point of purchase Treat illicit dealing in tobacco more seriously Customer frustration plain packaging/display restrictions Reduced consumer choice 33

34 QUESTIONS AND ANSWERS? 34

35 Consumer Packaging Manufacturers Alliance END For More Information Consumer Packaging Manufacturers Alliance Limited ILKLEY West Yorkshire UK 35

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