Why Tobacco Display Bans Are Bad Policy

As various US states pursue their war on tobacco, whether it be through outrageous tax hikes or through mooting the possibility of the intellectual-property-rights-violating 'display bans', it is worthwhile to look at the international expirience.

This week the Irish Police made a haul of contraband cigarettes in Irish history, with 120 million cigarettes worth over $75USD million. Just let that number sink in. $75 million. In one shipment. But it's even more than that: cigarette smuggling was costingover $1 billion US a year in lost taxes,  lost duties and VAT, with 25 percent of cigarettes smoked in the country now contraband. As the Irish Examiner reported, 'the illegal trade is reaching epidemic proportions'.

According to research by Patrick Basham and John Luik, the reason why display bans have led to increased smuggling this are multiple.

"Firstly, a display ban undermines the belief that tobacco is a legal, regulated product and that selling and consuming counterfeit and smuggled tobacco products are crimes. Surveys in Canada have found, for example, that a majority of Canadians who buy illicit cigarettes do not believe that they are committing a crime. Second, display bans fuel the illicit tobacco market by making it more difficult for customers to distinguish between legal and illegal products, since all tobacco is hidden from view. Third, display bans make it easier for dishonest store keepers to mix illicit and untaxed tobacco products and legitimate taxed cigarettes and thus to pass off illicit products. Fourth, display bans make it more difficult for enforcement agencies, already overtaxed, to identify illicit tobacco products since all tobacco products are hidden from view. Fifth, through blurring the distinction between above and below the counter products, between legal cigarettes and illegal cigarettes, a display ban makes it more likely that smokers will increasingly get their tobacco from illegal as opposed to the legal and regulated tobacco market."

If only the nanny-state politicians here bothered to consult the evidence.

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