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Tobacco companies face tough regulations in the land down under

Australia vs. the Tobacco Industry

By IGI Global on Sep 9, 2013
Contributed by Sam Primak, Marketing Assistant

Australia vs. the Tobacco Industry The tobacco industry has taken quite a hit in Australia over the last two years. In November of 2011, the Australian Senate passed the plain packaging act, which said that all tobacco products must be sold in plain dark-colored packaging, sans logos. Instead, packages were to contain graphic health warnings. Not surprisingly, the act was challenged and brought to court. In August of 2012, the country’s high court reached a decision to uphold the act.

Australia’s government viewed the ruling as a major victory that would help set the stage for other countries battling the tobacco industry, as they were the first nation in the world to put these requirements in place. Public health advocates also hailed the high court’s decision, saying that it was an outstanding example of government protection from the marketing of big tobacco. The plain packaging act, however, was not Australia’s first attempt to deal a serious blow to tobacco companies. Previously, the government placed restrictions on Internet advertising, and put over $85 million in anti-smoking marketing campaigns, making it much more difficult for tobacco companies to market their products (CNN).

In a recent IGI Global chapter, “Marketing of Tobacco Products in Australia: Dealing with the Emerging Regulations”, author Rajeev Sharma (Charles Darwin University, Australia) examines the challenges that marketers will continue to face as a result of these stringent guidelines and restrictions on promotional options for tobacco product marketing in Australia.

With reference to the plain packaging act, Sharma writes that the “legislation is driven by two beliefs (1) cigarette smoking is the primary cause of half of all long-term smokers’ death and (2) tobacco products are not normal consumer products and therefore should not be allowed to be marketed by the traditional tools of marketing and promotion. The Australian Government believes that the […] change will take away the last opportunity that tobacco companies have in Australia, to try to market and promote their products by making them look luxurious or misrepresenting that they might be light and better for consumer health.”

Now, a year after the plain packaging act was instated, tobacco products are being sold in olive-green packets with graphic warnings, and public health officials are reporting that the packaging is effective, as more smokers are considering quitting. Meanwhile, tobacco companies are reporting no significant impacts on sales six months after the act was put into effect (Reuters).

Despite these reports, Sharma writes, “It is too early to confirm if the legislated changes to cigarette packaging will deliver the desired changes in consumption patterns among the wider society. It is equally uncertain to assess the exact impact of these changes on the financial position of the tobacco industry in Australia.”

Sharma’s chapter is part of the recent IGI Global publication, Cases on Consumer-Centric Marketing Management, edited by Vimi Jham (Institute of Management Technology, Dubai) and Sandeep Puri (Institute of Management Technology, Ghaziabad). This book is a collection of case studies highlighting the importance of customer loyalty, customer satisfaction, and consumer behavior for marketing strategies. This comprehensive collection provides fundamental research for professionals and researchers in the fields of customer relations, marketing communication, consumer research, and marketing analytics for insights into practical aspects of marketing in any organization.

Cases on Consumer-Centric Marketing Management is part of IGI Global’s Advances in Marketing, Customer Relationship Management, and E-Services Book Series, which addresses success factors for customer relationship management, marketing, and electronic services and its performance outcomes. This collection of reference source covers aspects of consumer behavior and marketing business strategies aiming towards researchers, scholars, and practitioners in the fields of marketing management.
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