Tobacco giants say changes to packaging in a no-deal Brexit will cost the industry millions and boost black market sales.
The multinational companies also voiced fears that wasted stock could cause a heavy environmental toll, concerns described as breathtaking hypocrisy by anti-smoking campaigners.
If the UK crashes out without a deal on 29 March it will immediately lose copyright for a European Commission-owned library of images showing cancers, vascular disease and other smoking harms that currently adorn packets.
Existing images change each May and the Department of Health and Social Care's (DHSC) plan to license images from the Australian government instead appeared to make this one of the more easily avoided Brexit pitfalls.
However, responses from industry groups, seen by The Independent, insisted that changing the images and making new packets would be prohibitively costly and environmentally damaging.
The government estimates that the cost would be less than £5m to the sector and, though challenging in the time frame, the change would be achievable.
Tobacco lobbyists said the costs would be far greater and warned that the UK could be left without a supply of legal, duty-paid tobacco products and that the market could be filled by illicit traders. The industry also claimed it could be forced to incinerate millions of unsellable products.
But despite their best efforts, the tobacco companies have been unable to win ministers over.
Minutes from a meeting between the DHSC and tobacco groups, on 17 December 2018, showed that in the Department’s view, the evidence provided by the industry on costs was neither compelling nor detailed.
But representatives for the Tobacco Manufacturers' Association said it couldn't possibly make the change in time, and appealed to the government to negotiate an urgent deal with the EU to extend the copyright – although civil servants pointed out there were other priorities.
“An urgent agreement with the EU is also not realistic in the event of no deal, as any discussions between the UK and EU during the next few months will need to focus on the most pressing and critical issues that need to be resolved by exit day,” Tim Baxter, the DHSC deputy director of healthy behaviours, said at the meeting.
Giles Roca, director of the Tobacco Manufacturers' Association, told The Independent that competition considerations and Brexit uncertainties prevented it from sharing details of the full impact, but he said there were big unresolved issues.
“You’ve got seven and a half million people in the UK who still smoke,” he said. “If you disrupt the supply chain of that you are in serious trouble in terms of finances to the Treasury – it’s about 2 per cent of – and what do you do with the old stock and the black market?
“There are big issues which quite frankly the Department of Health do not care about as they see this as an opportunity to get one over on the industry.”
Treasury revenues have to be offset against the costs to the NHS and lost productivity from smoking-related disease.
It also has to be weighed against the current environmental toll of tobacco production, which a World Health Organisation report said has a carbon footprint comparable to whole countries and disproportionately affecting the poorest.
“For the tobacco industry to wring their hands over the possible environmental impact of changing some picture warnings is breathtaking hypocrisy,” said Hazel Cheeseman, director of policy for Action on Smoking and Health.
“It seems likely the industry will cope with having to switch picture warnings a few months early and will no doubt manage to sell through their remaining stock in the year allowed to them.”
In the event that a deal was reached the pictures would still change, but with a longer transition period, the government told manufacturers.
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