The Premium Cigar Association (PCA) would like to bring to our UK partners, retailers, consumers, and all manufacturers a proposal that is making its way into law. The United Kingdom is seeking to implement plain packaging legislation which would take existing packaging and replace it with standardized packaging across all brands, without distinction in font and font size on the bands and boxes.
This kind of legislation does several harmful things simultaneously: infringes on the intellectual property rights of the manufacturers, only benefits the most widely recognized brands by consolidating market share, deeply harms retailers, and opens the country up to illicit/counterfeit trade.
The Intellectual Property Rights of Manufacturers
The boxes and bands that a cigar maker chooses to use for their cigars is not just simple marketing, it is showcasing the personality of the brand, the deep heritage, and craftsmanship. Taking these things away and standardizing packaging threatens to diminish the brand’s value thereby taking away some of the value of that brand. The UK government is seeking to take that value away with no material value to the consumer, the retailer, and certainly not the manufacturer.
Some cigar brands have been using the same designs for over one hundred years; consumers expect to see certain brand marks, images, seals, or text on the packaging to distinguish the country of origin, manufacturer, factories they were made in, or prominence of the cigar. By taking these brand marks and creative depictions away, the consumers will be more confused and lead to market consolidation.
Benefits The Most Widely Recognized Brands By Consolidating Market Share
The largest manufacturers, who already comply with plain packaging standards elsewhere in the world, could comply with these measures, and still be recognized on the shelf. Brand names who have had decades to become standard cigar shop names might be able to weather this change with some harm, but the real harm will be felt by brands who are new to the UK market, or would like to enter the market in the future. These brands would have to compete with well established brands, with no way to distinguish their products from the largest names in the industry. Brand marks and branding help the consumer notice new products on the shelf and will aid in small businesses gaining market share.
The process of compliance with this new measure would also be costly to smaller manufacturers, or manufacturers who are just starting out. With an upfront cost of compliance, paired with the standardization of branding across the industry, the UK would be heavily discouraging new brands to enter the market, thereby consolidating the UK cigar market to just a few select brands who can weather the change.
Deeply Harms Retailers
This measure would [V1] be detrimental to specialty tobacco retailers in the UK. Having only select brands being brought to market in the UK means each retailer would carry very similar products, making competition between stores even higher.
The application of the standardised packaging would disproportionally affect Specialist Tobacconists considering the importance of cigars in their revenue (80% of cigars volume is sold in the UK by Specialist Tobacconists, an historic branch of UK commercial culture). The introduction of standardised packaging for some tobacco products has already significantly impacted small specialist tobacconists with increased operational costs and reduced product differentiation.
The other way this measure will deeply harm retailers is in the reduction of distinction of products, leading to an increase incidence of incorrect identification of products for consumers with transaction times impacted and delayed. The loss of brand marks, vintage boxes and bands, a consumer being able to distinguish between a £500 box of cigars and a £5,000 box of cigars would be very difficult, and only reserved for the most sophisticated consumers.
Opens The Country Up To Illicit/Counterfeit Trade
With the standardization of boxes and bands, the illicit trade and counterfeiting of products becomes very easy. Right now, boxes and bands utilize different ways of product verification. Serialized bands, authenticating seals, holograms, tamper proof seals, raised lettering, and artisan craftsmanship distinguish a genuine product from a counterfeit. With the market standardization, anyone with a proper printer can print whatever they would like on the box and bands, misrepresenting a product as genuine. Though counterfeiting would remain illegal in the UK, the market standardization would make it easy for criminal organizations to take advantage, and profit.
Action
With these changes on the horizon in the UK, the Premium Cigar Association encourages all concerned parties to take action, and fight back. Visit https://savecigars.co.uk/ to take action today, and protect a cigar market that is built on heritage, tradition, competition, and variety. PCA stands with our UK partners, and need your help in doing so.
– Article contributed by the PCA Government Affairs team.