Loved the disjointed thinking in this article:- http://news.uk.msn.com: Tobacco promotion crackdown starts.
The disjointedness comes not from MSN but from the questionable motives and weaknesses in the (latest) Goverment's legislation on the sale of tobacco products.
Personally I am a non-smoker and disagree with it but have to admit to considering British American Tobacco on its merits as an investment recently.
And, having made mental note of the ever present political threat that continues to circle the industry I am alert to any new moves that might change the dynamics of the industry and the strong cash-flows that the industry benefits from.
Working through the PEST acronym (Political, Economic, Social, Technological), to identify and categorize threats, any legislative action against the Tobacco products industry is often from a political source, would have an economic impact, and is often driven by changes in social attitudes.
So any new legislation could actually span 3 of the 4 categories and have a disproportionate impact.
After picking up the headline on this article: Tobacco promotion crackdown starts, I thought a new move had started.
Picking out the key words: banning; Government; Health Secretary etc. only increased my interest and desire to understand the potential impact on the tobacco industry.
So what is the new legislation:
"The new legislation means all large shops and supermarkets in England must cover up cigarettes and hide tobacco products from public view."
"The Department of Health said the move was in response to evidence that cigarette displays in shops can encourage young people to take up the habit."
The Government rhetoric says all the right things referencing research and the impact of advertising on young people, the next generation of smokers:
"More than 300,000 children under 16 try smoking each year and 5% of children aged 11 to 15 are regular smokers, according to its figures. Meanwhile 39% of smokers say that they were smoking regularly before the age of 16."
"Health Minister Anne Milton said: "We cannot ignore the fact that young people are recruited into smoking by colourful, eye-catching, cigarette displays. Most adult smokers started smoking as teenagers and we need to stop this trend.
"Banning displays of cigarettes and tobacco will help young people resist the pressure to start smoking and help the thousands of adults in England who are currently trying to quit.""
So the legislation is aimed at stopping the next generation from picking up the habit from colourful displays of tobacco products, great, but why then is it only supermarkets and large stores that are being targeted in this first phase.
It will be another 3 years before a blanket crackdown picks up smaller businesses.
And whilst I appreciate the deferred potential financial impact on smaller businesses it strikes me that that would be the most likely environment (including newsagents and corner shops), in which younger people might be influenced by colourful advertising and be subject to peer pressure as opposed to a parent's view.
Its even less likely that an under 16 would be able to purchase tobacco products in the larger stores due to their much higher profile.
So whilst it is a gesture, I don't personally feel that there is a significant impact to come from it and will have an almost negligible impact on the target audience of under 16's.
More importantly a cynic might suggest that it will have little impact on tax revenues from the sale of tobacco products. At least not until the 2015 roll-out at which time the support for the policy will have been tested and the next election will have become an historic event.
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