A report issued last week by UBS Investment Research analyzes trends in cigarette consumption in five major economies that recently mandated warning labels similar to those that the FDA will require starting next year (Canada, Australia, Brazil, the U.K., and India). The report compares cigarette sales during the three years before and three years after implementation of the graphic warning labels.
The rate of decline in cigarette sales following the graphic warning labels increased in two countries, and decreased in three of the countries. Overall, the analysis fails to provide any significant evidence that graphic warning labels have a substantial effect on cigarette consumption.
The Rest of the Story
This analysis supports my general conclusion regarding the overall scientific evidence about the likely impact of the soon to be implemented graphic warning labels. While I believe that a small short-term effect on cigarette smoking among existing smokers is likely, I do not think the effect will be substantial, nor will it be sustained over the long-term. The experience of several other countries seems to bear this out.
The warning labels do not appear to represent any significant threat to cigarette company profits. Sadly, that is the strongest aspect of the Family Smoking Prevention and Tobacco Control Act.
From now on, I must use parentheses when citing the act, as it is more appropriately the Family Smoking "Prevention" and Tobacco "Control" Act. The only thing being prevented is the deterioration of the profitability of the tobacco companies. And the only thing being controlled is the ability of smaller companies to compete with the big guys, especially Philip Morris, which dominates current domestic market share.