Fewer smokers and rising prices bigger threat than plain packs

Rising costs and a health-conscious younger generation are bigger threats to tobacco retailers than plain packaging, an Australian shop owner has claimed.

“Sales have gone down [since plain packaging came in], but not markedly,” said Steve Sharman, owner of Carrara Village News in Australia’s Gold Coast.

“Tobacco sales are slowing down because more and more people are giving up smoking. I think the greater deterrent has been the government introducing the rolling tax increase for the next four years.”

Last month, Retail Express reported that the Australian government had introduced a new tax on tobacco products, which would increase by 12.5% every year until 2020. This, Sharman said, is making smoking a “financial burden”.

“On top of the cumulative tax, there will be manufacturer increases,” he explained. “So really, we’re looking at price increases of about 15 to 20% a year. People are already turning to cheaper brands.”

Simon Clark, director of smokers’ group Forest, told Retail Express that tobacco prices will continue to rise in the UK – and that a move in the same direction as Australia cannot be ruled out.

While Sharman claimed plain packaging was not deterring smokers from the habit, he said that younger generations were no longer taking up smoking. “I’m mostly selling to smokers who have smoked for years,” he said.

Sharman assured retailers that there was no need to panic about adapting to plain packaging.

“There was a transitional period as the packs came into circulation months before they were made compulsory. I only bought what I knew I could sell within seven days to ensure that by the time the legislation came in, I had none of the old stock left.”