EFFECTS OF TIGHTER PACKAGING RULES

IN 1975, a food and beverage company started its legendary marketing campaign, where it got regular people to do a blind test and drink two cups filled with different colas, and pick a favourite.

The campaign is still being recreated for fun , this time, updated for the social media generation. Instead of picking out their preferred drink, fans of either brands are often asked to name what they were drinking. It was harder than thought. An experiment by media company Business Insider with 21 participants showed that more than half got their guesses wrong, even though all said they were confident of naming what they were drinking.

The short, just-for-laughs clip drove home a simple fact: packaging and branding made all the difference. The cola drinkers’ loyalties were to the brand, not to the taste of the beverage. But, such branding efforts will be made useless if plain packaging — a growing threat in the packaging industry — were introduced for sugared drinks. Plain packaging refers to packaging that removes all branding, including colours, logos and trademark, with manufacturers allowed to print the brand name only in a standard size, font and placement.

As developed societies grapple with increasing health issues, such as obesity, diabetes and heart disease, lobbyists have pointed to glitzy product packaging as the cause of the problem. But, how do you define “glitziness”?

The reasoning is that people pick out these products because of their attractive packaging. If the design elements were removed from the packaging and large graphic warnings took the place of fancy fonts and colour combinations, the unattractiveness of the packaging will turn consumers off. But, do they ?

Plain packaging was introduced nearly five years ago for tobacco products in Australia, with France, the United Kingdom and Ireland recently following the trend. Whether the move has indeed lowered smoking rates, or merely moved smokers towards illegal cigarettes, is unclear and the resulting outcome in Australia is inconclusive.

But, one thing is certain: supporters of plain packaging following the development in the tobacco sector are calling for tighter packaging guidelines for products such as sweetened drinks, confectionery goods and alcohol.

In February, Public Health England, an executive agency of UK’s Department of Health, urged the government to consider plain packaging for alcohol, arguing that the current alcohol labelling was ineffective at changing drinking behaviour. In June, members of the British Medical Association, the professional association for doctors in the UK, called for tobacco-pack style warnings for sweets to fight against childhood obesity and rising tooth decay rates.

But, the law leads us down a slippery slope — which product type should have plain packaging next? More importantly, it comes with negative downstream effects on the economy and can affect a range of business activities.

FIRSTLY, intellectual property rights are compromised when brand owners are not able to use their brands on their products. Organised groups producing counterfeits will have an easier time faking a product that has standardised its packaging to a template. Brands invest hefty sums in anti-counterfeit efforts to protect their logos and trademarks. But, a law like plain packaging hands valuable information to counterfeiters on a plate. Once syndicates get their hands on the plain packaging template, there is little stopping them from bulk producing fake goods that look so genuine.

The illicit trade is already a serious problem in Malaysia and plain packaging, which reduces design complexity, will only add to the illegal dealing in tobacco goods as it is doing in those countries which have adopted Brand Banning in the form of plain packaging; and,

SECONDLY, plain packaging discourages innovation. Brands will have few reasons to invest in branding and product differentiation, and developers of new pack designs will be restricted to the detriment of the consumer.

When a product’s design is pared down to its most basic, the branding effort is so simplified that it is almost redundant.

This means job functions are lost and machines, previously working at sophisticated levels, are now dumbed down and no longer operating at their full potential — an inefficient way of using resources.

Effects of such inefficiency have started showing in the tobacco industry in the UK, where plain packaging commenced 18 months ago with a result that companies manufacturing packaging materials closed in Bradford in the north of England and Portsmouth and Bristol in the south.

This followed the ending of all tobacco manufacturing throughout the UK, which is a trend spreading across other European countries. Malaysia would be no exception with already production operations under review and printing works closing down as the new regulations considerably made their work unsustainable.

Other industries that work closely with packaging companies, such as the materials sector, and advertising and branding agencies, will take a hit, as well as stricter packaging rules mean fewer jobs for them.

Glitzy packaging is an easy scapegoat in discussions about consumers’ poor lifestyles and diet, which can and should be improved by strengthened communication, education and public awareness efforts. Legislators must bear in mind the unintended consequences of tighter packaging guidelines when considering the implementation of such laws.

MIKE RIDGWAY Director, Consumer Packaging Manufacturers Alliance, West Yorkshire, the United Kingdom