Still in the dark
Published:  17 September, 2010

Retailers are in the dark about going dark. The tobacco display ban is scheduled to hit large stores in just over a year – but with the clock ticking, there is still no clarity about what form it will take or even if it will really go ahead.

The English trade is still hopeful that the ban may be derailed, or at least modified, after the new government promised to review Labour’s plans over the summer, with results expected this month or next.

But in Scotland the authorities are pushing ahead with stringent measures that could mean retailers are not allowed to show more than 120sq cm of tobacco products when making a sale – little more than the size of a single cigarette packet.

Meanwhile, Wales is still consulting on the display ban, while Northern Ireland has not yet published details to consult on – despite Health Minister Michael McGimpsey having said he hoped to bring the ban in before the end of this year.

As it stands, the ban is due to come into force on October 1, 2011 for big retailers and October 1, 2013 for small shops.

Jenny Brown, public affairs manager for the Association of Convenience Stores, says: “It’s problematic. It will soon be under a year [to possible implementation] and we still don’t have any certainty. Large retailers have got large estates and they have to roll it out – that is going to be the main problem. We are going to be pushing the government as much as possible to get some clarity about what the regulations are.”?But she believes it would be difficult for the coalition government to revoke the ban entirely. “It is now a controversial issue. Completely revoking it would be very problematic – the health lobby is lobbying government very hard and if it reviews it, it will view it as a pro-tobacco measure,” she said.

Katherine Graham, campaign manager for the Tobacco Retailers Alliance, is more hopeful. “When this measure was going through Parliament the Conservatives opposed it,” she says. “They were very concerned there was no evidence for the health case and about the detrimental impact it would have on small businesses. They said if they won the election they would review the decision and have a proper look at it.

“Retailers are quite hopeful they will make a decision soon and look at alternative ways to stop youth smoking.”?If the government doesn’t drop the display ban it will have to face four judicial review actions brought by tobacco companies and retailers.

The actions were launched around the end of April, but because of a backlog of work the courts have not yet decided whether they will go to full hearings. If the case still hasn’t been heard by the time the ban is due to come into force, the parties could apply for an injunction to try and stop it going ahead.

Ronan Barry, head of corporate and regulatory affairs for British American Tobacco UK, says: “There seems to be a recognition that the move would be extremely costly for shops – small shops in particular – and the evidence supporting it is pretty non-existent, so for those reasons it is under review. Until that process is finished it is impossible to prepare, and that is frustrating for retailers.”?Jeremy Blackburn, head of communications for JTI, says: “We understand that tobacco products carry risks to health, and regulation that is appropriate and proportionate is correct and necessary. We would accept regulatory measures based on accepted principles of better regulation, which should be clear, transparent, accountable, proportionate, consistent and only really where the case is needed.

“We are clear in our belief that display bans will not have the intended effect, they are unnecessary and unjustified. We also remain very concerned that they will exacerbate the issue of illicit trade and actually believe there are better ways of reducing youth smoking, which is the intention behind the display bans.

“We support the criminalisation of proxy purchasing and, indeed, attempted purchase or purchase of tobacco products by youth.”?Illicit trade fearsThe concern that the display ban will cause an increase in illicit trade is widespread.

In Ireland, where a tobacco display ban came into force in July 2009, non-duty-paid cigarettes have increased from 7% in 2005 to 27% in 2009 – with much of the increase coming after the ban was introduced, according to Imperial Tobacco.

PR manager Iain Watkins says: “A display ban will exacerbate the already significant levels of illicit trade taking place throughout the UK. Illicit trade undermines public health objectives, damages legitimate business and results in substantial revenue losses to HM Treasury through creating a market that is uncontrolled, untaxed and unaccountable.”?“It is the way it affects smokers’ perceptions of buying tobacco,” says the TRA’s Graham. “If smokers go into a shop and ask for something to be pulled out it is supposed to make them feel as if they are doing something wrong and something illicit. It blurs distinction in their mind between legal and illicit tobacco.”?She adds that this is another reason why the display ban will not help reduce youth smoking.

“It is the forbidden-fruit theory. Young people don’t smoke because it is normal and acceptable, they smoke because they are rebelling and because they know damn well they are not supposed to.”?BAT UK’s Barry warns that illicit trade is on the rise anyway: “There is a perception that illicit trade has been reducing. It hasn’t. Since the recession fewer people have been taking their holidays abroad. The industry is only able to assess the total amount of non-duty-paid consumption in the UK.

“Some of that is legitimate cross-border shopping, while the other part is smuggling illegal or counterfeit products. When the number of people travelling starts to drop, as it has done, the proportion of non-duty-paid consumption that is

egitimate cross-border shopping falls. Headline non-duty-paid consumption is falling as well, and that creates the mistaken impression that illegal trade is falling – but the availability and consumption of counterfeit products as a proportion of the total is increasing.”?Display issuesWhile English, Welsh and Northern Irish retailers face an uncertain future, the Scottish trade is looking at some alarming near-certainties.

The biggest concern for retailers is the tiny amount of space they are likely to be allowed to show cigarettes when they make a sale.

Price lists are also a worry – regulations say they should be written in type not much bigger than the font you are reading now. At a distance of several feet, that would be unreadable for most shoppers.

Nearly 90% of those who responded to the government consultation on the rules were opposed to them, with retailers calling for parity with the rest of the UK and dubbing the regulations “ridiculous”, “nonsense bullshit” and “crippling for our business”.

“What happens if you want to sell two packets?” asks the TRA’s Graham. “The Scottish government has always been very determined to implement the display ban. It wants to try and trump the rest of the UK, and go one step further and make it stricter than anywhere else in the world.

“The responses to their consultation on the regulations were overwhelmingly in opposition to the whole thing. Lots of people appealed to the government to relax the regulations and bring them into line with the rest of the UK.

“I’m not sure if it will – so far the Scottish government has not listened to Scottish shopkeepers so I don’t see why they are going to start now.”?How much it will cost for retailers to conform to the new law is a matter for discussion. The ACS suggests a minimum of £1,000 for small shops in England and Wales, with the SGF suggesting around £1,400 minimum in Scotland, with estimates ranging up to £20,000 for supermarkets.

SGF chief executive John Drummond says there are two possible ways for Scottish retailers to hide their tobacco – a system of flaps only big enough to show one packet of cigarettes, which could prove difficult to work because they might fall off with a lot of use, or a system of strips across the gantry which shop workers would reach through, which could look unsightly and cause health and safety issues.

Alternatively, retailers could move the whole tobacco area into a part of the shop which is hidden – but that poses security risks.

In Ireland the rules are much more relaxed, but many retailers already use dispensing machines. These would be a great solution in Scotland – if they weren’t so expensive. Estimates range from around £3,000 plus £1,000 installation costs to around £7,500 without installation for an under-the-counter model, putting them out of reach for many independents.

Graham says: “The point is it’s not just the initial outlay you have to make when making changes to the gantry, it’s the ongoing operational burden.

“If it takes twice as long to serve a customer you can only serve half the customers.”?Imperial’s Watkins says: “Imperial Tobacco has no current intention of paying for retailers’ shops to be adjusted in the event of a display ban. If the government is intent on introducing such unnecessary and ill-conceived legislation, then it should be prepared to help retailers to implement it.”

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