Wednesday, 13 May 2015

As If Prohibition Never Happened

While Australian anti-smoking lunatics continue to pat themselves on the back for installing the utterly pointless policy of plain packaging, BAT Australia has announced some astonishing news.
British American Tobacco Australia (BATA) is considering launching a Make Your Own (MYO) cigarette brand to try and capture the growing number of illegal chop chop smokers.
'Chop chop' is the colloquial name for bags of loose unbranded tobacco sold on the black market in Australia by criminal gangs.
BATA spokesperson Scott McIntyre said chop chop or illegal loose leaf tobacco now makes up the majority of the illegal black market and we are being forced to compete with organised crime for market share due to the government’s failed excise system. 
“Currently the illegal trade in Australia makes up 14.5 per cent of all tobacco consumed in Australia which is nearly 2.6 million tonnes and a big opportunity for us to steal back consumers,” Mr McIntyre said.
By 'failed excise system', McIntyre is referring to two obscene and irresponsible 12.5% increases in tobacco duty which have hugely distorted the Australian tobacco market.

Governments tend to dislike tobacco, we all know that, but such has the hysteria over smoking been whipped up in Australia that they seem to have abandoned all knowledge of the Laffer curve, the principles of Pigovian taxation, and the wise words of J S Mill on sin taxes.
“Every increase of cost is a prohibition, to those whose means to not come up to the augmented price"
Two crippling 12.5% excise duty rises would make legal tobacco unaffordable for large sections of any population, so it is hardly surprising that the gangs producing chop chop are doing brisk business. It's like the Aussie government is completely oblivious to the effects of Prohibition in 1920s USA.

Of course, their dozy politicians will probably point out that tobacco is still legal, just a little bit more expensive. But, as Mill accurately describes, if you price the less well off out of the legal market where else have they to go but the black one?

Mill also had this to say about the legitimacy of massive tax hikes on such products.
"To tax stimulants for the sole purpose of making them more difficult to be obtained is a measure differing only in degree from their entire prohibition, and would be justifiable only if that were justifiable.”
Now, Australia obviously doesn't believe it justifiable that tobacco be banned outright or they would have the balls to have done so by now. So instead they are witnessing the bizarre situation whereby a legal industry has been railroaded into competing with the criminals that the government have empowered by their hysterical fascist policies. Incredible stuff!

There's more though, because - despite this being an entirely predictable turn of events - anti-smoking lunatics are still trying to pretend that their unsustainable policy wet dreams are not insane in practice.

I've reported before on the stunning stupidity of these people in the UK, and how they consider the laws of economics not to apply to tobacco, but Australia has its own mad denialists too.
Australian Council on Smoking and Health president Mike Daube said it was a desperate and bizarre suggestion. 
"It's also a cynical ploy to get around curbs on cigarette promotion and to appeal to the most vulnerable sectors in the community," he said.
This Mike Daube, of course, is the same geriatric extremist anti-smoker who forced a production of Carmen to close because the 1875 opera is set in a cigarette factory ... and then lied about it; who believes passive smoke is more dangerous than exhaust fumes; who denies the benefits of e-cigs due to his anti-industry obsession; and who is so cowardly as to attack a part-time Cornwall waitress for daring to engage in debate.

He's now apparently worried about "the most vulnerable sectors in the community" - exactly the sectors in Australian community who his policies have forced into buying chop chop from organised criminals who don't care about age restrictions, and are not regulated by government. Blithely ignoring the effects of prohibition by taxation he encourages, and the perils of smokers buying their supplies from an unregulated market, instead he is attacking the legal one for daring to try to reel these people back in. There is a special place in hell reserved for rancid psychopaths like that.

In the meantime, we are actually at that point now where legal businesses are jockeying for position with organised crime for market share. Everyone in Australia who has allowed such a situation to develop should feel deeply ashamed, but then shame takes a back seat while they still have their snouts in the tobacco control trough, eh?


JLTrader said...

I don't really understand this news, is there no legal ryo (or myo) tobacco in Australia ? Or is it just that BATA hasn't entered that niche yet ?

On a different note, there's an annoying thing in that media release:

“The product could be sold as very cheap loose tobacco in 100 or 25gram pack. The MYO version could work out to be around $9 a pack for 25 cigarettes. Currently the cheapest pack of 25 cigarettes is just under $15 a pack.'' I wouldn't call that 'very cheap'. It's a bit cheaper than the wildly inflated state mandated price.

Dick_Puddlecote said...

I'm assuming that to compete with chop chop it would be a less processed and more raw product than HRT, but maybe someone from Oz can tell us more.

Yes, not cheap, but relatively so considering the cheapest appears to be £7.50 in real money!

jude said...

The tobacco companies will not be able to compete with "chop chop", as the government will not allow them to sell a legal product without all the propaganda packaging, and without the huge taxes imposed on any legal tobacco product.

Loose tobacco is available in Australia, and is less expensive than machine rolled cigarettes, but still extremely expensive compared to other countries, and out of the price range of many people. I was someone who used loose tobacco, and the cost was the main reason I switched over to vaping.

Chop chop is readily available even in my remote town, and this product is much cheaper, and often of a far better quality, than the legal product. Chop chop tends to be less adulterated than the legal product.

It is almost impossible to police, because people keep quiet about who they buy from, and most purchases are done through word of mouth, and not advertised, and loose tobacco can be transferred from the bag to a tin or pouch, and just looking at the product it is impossible to tell whether it is the legal product or not.

Our stupid government has caused this situation, and they are only making things worse by attempting to ban vaping as well, (they have already banned the sale of vape products in my state, as well as banned nicotine containing liquids from sale or supply across the whole country). It is even illegal to posses nicotine liquids in Queensland, and a man was recently prosecuted for this "offense". So they are creating yet another flourishing black market in nicotine liquids.

All the while they whinge about drops in tax revenues, because the taxes on tobacco products are now so high that the black markets are flourishing and they are getting no taxes, but rather than learn, the morons are busy creating ever more black markets. Idiots.

Jack Listerio said...

Hell bootleg tobacco is available in the states at nearly any truck stop......just go to the back parking area and ask.....

Jack Listerio said...

Jude big tobacco reimported name brand smokes back into Canada back in the 90s when the tax made a carton almost 100 bucks Canadian. They finally realized their folly and lowered the taxes and then turned right around and did it again less than ten years later and they likely have the biggest blackmarket in the world. Some parts of Canada Ive read that 80% of the market is bootleg. Even behind the countries supreme court 60% of the butts of court staffers were found to be blackmarket brands.

Jack Listerio said...

DP is just reporting in a timely matter how prohibition eventually ends and the Nazis still sing along as the titanic sinks.

Ravi Daveros said...

Considering a small pouch (30gm) of regular rolling tobacco was north of $30 a few years ago, I don't see this panning out well unless their suppliers are the italians and vietnamese market gardeners who currently flog 1 kg bags off for $50 at the markets. (under the table of course)

jude said...

Yeah, I know Jack, but the morons in government, and the parasites in public health, will try and pretend that its not happening. Chapman in Australia is one of the main purveyor of the tobacco control lies about how there is no black market tobacco sold here, or that it is a growing market.

Where people, who are otherwise law abiding citizens, would never dream of buying black market goods, many smokers figure that they are treated like criminals anyway, they are ripped off by government taxes, and put up with the constant hypocritical hate campaigns, that buying black market tobacco is not even seen as doing something "wrong" . There's an old saying, "may as well be hung for a sheep, as a lamb", and this is the attitude a lot of smokers have towards buying black market tobacco products.

I would not be in the least surprised if the actual level of black market tobacco sales, exceeds the levels quoted in the article. When you force people into using a black market, they are hardly going to be shouting about it to the government or press.

Cherie said...

I have just gone back through my budget spreadsheets - this is how the increases have gone: I buy by the carton, which is 6 x 30 cigs.
2009: $71-$74 per carton ($11-$12 per pack)
2010: $77-$94 per carton ($12-$15 per pack)
2011: $94-$102 per carton ($15-$17 per pack)
2012: $98-$104 per carton ($16-$17 per pack)
2013: $104-$125 per carton ($17-$20 per pack)
2014: $121-$132 per carton ($20-$22 per pack)
2015: $132-$145 per carton ($22-$24 per pack)
As you can see, they have doubled in price over the last 5 years. I have handed out so many on the street, constantly asked if I can spare one, and I always oblige as I know how expensive they are, and if I won't give them one who's to say they won't rob someone to get some!

What the.... said...

….is referring to two obscene and irresponsible 12.5% increases in tobacco duty which have hugely distorted the Australian tobacco market.

Keep in mind that a few years before these 2 x 12.5% increases in tobacco duty there was a 25% increase in tobacco duty introduced by the then governing Labour Party. And these 2 x 12.5% increases still aren’t enough. In the next 2 years there will be another 2 x 12.5% increases in tobacco duty. But even that isn’t enough. While there are these massive whacks
on tobacco duty, there are also 2 automatic price increases per annum on
tobacco. These have been going on for years. They used to be aligned to the CPI. But even this isn’t enough. These auto increases are now aligned to “average male weekly earnings” which yields a higher rate of increase than the CPI.

In Australia do we see a “super” extortion of tobacco consumers. There have been decades of collusion by prohibitionists and politicians (who see the potential for “big bucks”). The pontificating prohibitionists and accommodating politicians have worked themselves into a frenzy of greed attempting to maximally fleece tobacco consumers under the guise of “help to quit”. The circumstance is incredibly obscene and, yes, Australia
should be ashamed that it has allowed this sanctimonious idiocy to flourish on such a scale. There are many tobacco consumers that have figured out that the incessant, taxpayer-funded antismoking moralizing is a means to grand robbery by government that is supposed to represent them. It’s government that’s conducting itself as a criminal entity: There are a plethora of lies to rationalize ever-increasing theft. In contrast, a contraband market appears far less criminal than government.

What the.... said...

Daube the “superhero”:

There are real superheroes living among us. This is Mike Daube, and he’s here to help save lives.

Standard "god complex".

What the.... said...

DP, I have a comment that seems to have been lost/misplaced in the Disqus “machinations”.

PatNurse said...

I'm guessing in that case that tobacco companies have given up any idea of producing quality and think like the rest of the thugs - smokers should pay over the odds to be sold pure crap. Mind you, that's just what the fascists in Aussie wonderland want. Poor old smokers get beaten up both by industry and by the industry's enemies.

Jack Listerio said...

DP what it means is eventually everyone will be in the rackets selling tobacco. More demand breeds more product and lower costs. Of course quality is always the first casualty.

Jack Listerio said...

JL Australia has how many thousands of miles of can literally sail in drop your cargo and go..........nobody ever knows the difference.

Jack Listerio said...

Here in America I was working for Loral aerospace and we were running these mobile trucks on the coastline along the southern coast. It was a mini radar set on a weather balloon lofted into the sky sorta like the blitz balloons over London in 1940. We were to spot and report any low flying planes skimming the water coming in for drug enforcement. The government closed that down about 1995.

Jack Listerio said...

Capitalism’s Defenders Take On The Plain Packaging Zealots – Breitbart

The International Trademark Association (INTA) has joined the legal battle against plain packaging for tobacco products in order to champion property rights. In…