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In the News

New cigarette packaging regulations comes in to force today

Jonny Clark

20th May 2016

New regulations on cigarette packaging (and other restrictions within the cigarette market) comes in to force today. Click here for the Sky News article on the regulations and here for a BBC Newsbeat report on the issue (and click quickly, before the Newsbeat section is removed due to BBC cuts!).

Plain packaging on all cigarettes is now being forcibly introduced alongside a phasing out of menthol cigarettes (as they as seen as being more popular with young people) and removal of positive sounding phrases such as 'less harmful than other brands' (can you imagine any other product where that would be your most positive selling point?!).

Cigarettes, of course, have long been our staple example of a demerit good, alongside government failure when intervening (due to their inelastic demand and degree of habit). For those students wishing to use this example a couple of analytical points may be of value:

The new regulations have taken their time to come in to force due to legal challenges from the cigarette industry, indicating that government policies to regulate demerit goods are not just something that can simply be put in place.

The changes are being phased in (removing menthol cigarettes won't be fully in place until 2020), again indicating that governments intervention may suffer from time lags when applying new regulations.

Lastly, much of this legislation is being enforced by the European Union. Now there's a whole different set of arguments!

Jonny Clark

Jon Clark has been teaching economics and business studies for over 25 years primarily in the Further Education sector. Before joining tutor2u, he was a senior manager at South Cheshire College in Crewe.

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