Tobacco industry threatens to flood Australia with cheap cigarettes

TONY Abbott says removing branding from cigarette packets could be counterproductive but has signalled the Opposition is likely to support the plan.

Speaking in Geelong today Mr Abbott, who as health minister introduced graphic warnings on cigarette packets, said he supported “effective action” on reducing smoking rates.

“The Coalition in principal supports all reasonable measures to get smoking rates down,” he said.

Australia with cheap cigarettes

Australia with cheap cigarettes

“My anxiety with this is that it might be being counterproductive in practice.”

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Mr Abbott was in Geelong visiting car maker Ford’s production plant to fire another salvo against the Gillard Government’s carbon tax.

Mr Abbott said the Motor Industry Association had estimated a carbon price of $30 a tonne would add $84 million to the costs of the industry and $412 to the price of a typical car.

He said reports today of a $40 a tonne carbon tax made the news for Aussie manufacturing jobs even worse.

“The point of this tax is whatever level it starts at it is going to go up and up and up,” Mr Abbott said.

“And I say to the Australian people trust this prime minister at your peril.”

Mr Abbott is now headed to Colac where he will speak at a community forum.

The chief executive of British American Tobacco – which makes Winfield and Benson & Hedges – yesterday told the Herald Sun cigarette prices could be halved as tobacco giants tried to compete with black market imports.

About 22 billion cigarettes are sold in Australia each year.

The Federal Government plans to replace all branding on packets with a drab olive-green colour accompanied only by the name of the cigarette and a graphic health warning.

BAT Australia chief David Crow said companies would be forced to drastically cut prices because no-name “chop-chop” tobacco and cigarettes – which cost as little as 30 per cent of the cost of a regular packet – would be more attractive.

“Could cigarettes halve over time? In the longer term, potentially yes,” Mr Crow said.

He said the cheap prices “basically means more people will smoke, more kids will smoke”.

“It’s going to backfire and go bad and lead to more people smoking, which is just mad if you’re sitting at a Government desk,” he said.

Health Minister Nicola Roxon rejected the claims as a sign of desperation.

“Big tobacco are fighting to protect their profits, but we are fighting to save lives,” she said.

“We are not going to back away from this fight. We have won these fights in the past and we will win again.”

Mr Crow said BAT would fight to keep its brands alive and demand “billions of dollars” in compensation if the Federal Government pressed ahead with the proposal.

“Guys like us are going to defend our trademark,” Mr Crow said.

“If they lose it (the legal battle), which we think they will, they’ll have to pay compensation and that’s billions of dollars – and that’s not a smart use of taxpayers’ money.”

Increasing the price of cigarettes by 10 per cent has been proved to cut the smoking rate by at least 4 per cent.

Sydney University school of public health Prof Simon Chapman said the reaction by tobacco companies proved how worried they were about plain packaging.

“It is telling us how important this move is because the tobacco industry is spinning out of control by threatening price reductions and talk of illegal trade”, he said.

“The Government can turn around overnight and increase the excise, and they have in the past.”

– Joe Hildebrand, Kate Sikora, Wes Hosking

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