Mr. John Freda:

I thank the Chairman and members for inviting JTI to present to the Joint Committee on Health and Children on plain packaging. I am joined by Mr. Michiel Reerink from our regulatory department.

Japan Tobacco International acquired Gallaher in 2007. Today, we supply tobacco products to more than 4,000 retailers across the country as well as employing more than 100 people. Our business is based on a number of core principles. Tobacco products carry risk to health and, therefore, appropriate and proportionate regulation of the tobacco sector is necessary and right. Everyone in Ireland should be reminded about the health risks of smoking. Most importantly, minors should not smoke nor should they be able to access or buy tobacco products.

In line with the regulatory impact assessment guidelines of the Department of the Taoiseach, a regulatory impact assessment must be conducted before a memorandum goes to Government seeking permission to regulate. The memorandum and heads of a Bill must be accompanied by a draft regulatory impact assessment. Despite the far-reaching consequences of the plain packaging proposal, we are concerned that no regulatory impact assessment has been completed to date. Therefore, we believe that the committee should call for an independent and robust regulatory impact assessment to be completed and reviewed by the committee and all Government Departments before the plain packaging Bill goes any further.

I am sure the committee is well aware that the Minister, Deputy Reilly, led discussions at an EU level on the revision of the tobacco products directive during the Irish Presidency. The outcome of these talks was that the member states and later the European Parliament agreed that plain packaging should not be included in the revised directive. However, the committee should also be aware that measures proposed within this directive will change the current landscape of tobacco across Europe.

The directive includes requirements to increase health warnings to 65% of the pack and a ban on certain pack shapes, including the current packaging for slim cigarettes. Therefore, with the changes expected as a result of the directive, why does the Irish Government need to introduce plain packaging in Ireland?

Let me tell the committee the three primary reasons JTI is so opposed to plain packaging. First, there is no credible evidence that plain packaging will actually achieve public health benefits. We believe it will make the situation worse. Second, the proposed legislation will prevent us from communicating with our consumers about our brands and their right to receive this from us.

Third, it will deprive us of our property, by removing our ability to differentiate our products from those of our competitors. If the proposals on plain packaging are implemented, there is no doubt in our mind that it will damage competition, will infringe rights and freedoms, including those enshrined in European law, will raise barriers to trade and will ultimately result in a loss of jobs across Ireland.

The concept of plain packaging is based on an outdated notion of smoking behaviour. Regulators and academics tell us that children start smoking for many reasons. It is a combination of factors such as peer pressure, which plays a major role, and family and parental influence, which is also an important factor. The real key enabler is access to and availability of cheap tobacco products. It is not, however, the packaging of cigarettes.

Let me tell members more about the role of packaging. As with most consumer goods companies, brands are central to our business. We invest and innovate in packaging, design and quality so that we can compete with other products available to adult smokers, who, knowing the risks of smoking, want to smoke. Let me stress that we do not target children. A key challenge is to ensure that children cannot access tobacco products.

The best way to achieve this is to maintain a regulated and highly disciplined market where tobacco can be sold legally and stamp out the selling of untaxed and unregulated tobacco at a fraction of the price to children by organised criminals and illegal traders. These people do not care about the quality of the product or about the age of the child to whom they sell it. Let nobody be under any illusion - one of the serious consequences of plain packaging is that it will lead to a further growth in this highly lucrative illegal and unregulated trade in Ireland. The introduction of plain packaging will also increase children's access to tobacco in the unregulated market as prices are at least 50% cheaper than those of our disciplined retailers.

The Government's own reports state that when measuring levels of smoking, the vulnerable and disadvantaged are more at risk. The inevitable growth of the illicit trade, which is already too high, will only serve to further exacerbate this problem. We firmly believe that methods that are evidence based must be introduced to achieve public health benefits. As I mentioned earlier, we must prevent minors from accessing tobacco products. This can be done by reinforcing the age limit, by devising meaningful policies that make it harder for children to get their hands on tobacco, and punishing adults who knowingly buy tobacco products for children and-----