In this paper I wrote with David Prentice we say yes though it is difficult to say by how much because there have been no previous trials of this policy device. The policy is however essentially a tightening of opportunities to market cigarettes. We therefore use the industrial organisation literature and evidence from two previous phases of advertising restrictions – on, in turn, advertising in electronic and in the print media – to deduce that (i) cigarette prices will plausibly fall and (ii) incentives for entry of new legal suppliers will weaken because of reduced profitability. Price falls can and should be offset by increases in the tobacco excise so that these mechanisms suggest that, there is no potential for the plain packaging reforms to increase cigarette consumption. At worst the effect in reducing smoking will be small and this seems unlikely given the key role that branding occupies in the marketing efforts of tobacco producers. Likewise the incentives offered to illegal producers will diminish and the possibility of an expansion of illegal sales seems to have been overstated given worsening general industry returns. Issues of counterfeiting illegal brands also seem to have been overstated since plain packaging can be drab and unattractive but still be complicated to reproduce.
Australia’s plain packaging package seems at worse to be a costless experiment. Indeed it can be viewed as providing an international public good at almost zero public cost. The policy insight obtained from this experiment about the extent to which plain packaging is effective is highly useful information. (1054)