This year will offer little respite from the storm of regulation which rained on the industry in 2007.
Hot on the heels of the ban on smoking in public places and the tobacco age increase came a law banning the manufacture of non-child resistant lighters.
Manufacturers have been producing the new-style lighters, which have a more complex ignition process, since March 11, 2007, and from March 11 this year it became illegal for retailers to sell the old style.
Next on the regulatory list will be pictorial health warnings. Gruesome images of rotten teeth, cancerous growths and blackened lungs will enter the supply chain on the back of packs on September 30, 2008. Retailers will have until September 30, 2009, to sell through cigarette stocks without the warnings, and September 30, 2010, to sell through cigars, RYO tobacco and pipe tobacco displaying only text warnings. With proper stock rotation, retailers shouldn't have existing rear text health warning cigarette packs in store after September 30, 2009.
Needless to say, the images haven't been welcomed by the industry. Speaking at the launch of Imperial Tobacco's latest category review, general manager Peter Richards said: "Pictorial health warnings achieve nothing but to further stigmatise informed adults who choose to smoke."
The government's justification for them is that if provided with even more graphic information, more people would choose not to smoke.
However, the industry has slammed this argument using examples of other countries such as Canada, where no evidence has been found to show that consumption levels have dropped
as a result.
To help retailers deal with the change, Gallaher has launched an information website at www.phwarnings.com.
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The industry could find pictorial health warnings to be the least of its problems, though, if proposals to ban the sale of cigarettes in packs of less than 20 get the green light.
The government believes that 10-packs are attractive to minors and wants to ban them in a bid to reduce take-up rates and cut underage smoking. However, the industry claims that such a move would put the thousands of legitimate adult smokers who choose to buy 10s for cost reasons at a huge disadvantage.
The 10s market currently accounts for one in five cigarettes sold, meaning that a ban could also result in serious losses for retailers. However, there are some retailers who believe that a ban on 10s could end up being a good thing. Yorkshire-based Londis retailer Barrie Seymour banned smaller pack sizes after he started to experience problems with gangs of underaged youths. He claims that since the ban, the problems with the youths have disappeared and that his sales of 20-packs have increased by almost 30% as adult shoppers switched to larger sizes.
Another issue in the pipeline is the restriction on display of tobacco products in stores. Legislation could force retailers across the UK to carry out costly refits to ensure that their gantries are hidden from view. It could even go so far as to require retailers to keep tobacco products in locked draws under the counter, as is the case in Thailand and Iceland.
Figures from the Association of Convenience Stores (ACS) suggest that new equipment to screen tobacco displays from view could cost the industry as much as £252m. The minimum a single store could expect to pay is £1,850, but this figure could rise to as much as £4,985, depending on the requirements, the ACS says.
The UK government is running a consultation into all potential restrictions this summer, and the industry is urging retailers to get involved and share their concerns with their local MPs.
Gallaher head of communications Jeremy Blackburn says: "We must stand together and tell the government in one voice that enough is enough. Tobacco is a legal product and responsible retailers have a right to sell it."
Forcing retailers to hide tobacco under the counter would not only impact on profits, but it could also put them at risk of theft and abuse, he adds.
A spokeswoman for the Tobacco Manufacturers' Association believes that concealing tobacco products from view could encourage the illicit trade: "Hiding products from view makes it easier for traders of smuggled product to blend it into the legal supply chain and could pose further challenges to the enforcement effort against such traders."
Blackburn adds: "If people are not aware of what and where they can buy tobacco products they will go elsewhere, most likely to the illict trade."
A provincial-wide tobacco display ban has recently been rolled out in Canada. Stores have been forced to fit special "containment units" over their displays, the most popular of which is a specially designed false wall, which contains small cabinet doors behind which the cigarettes are housed. Staff must ensure that tobacco products are not displayed to customers while re-stocking, or any other process that may require the storage device to be opened and tobacco products viewed.
Positive or negative?
Another issue on which the UK government plans to consult this year is whether tobacco retailers should be licensed and, if so, whether to implement a negative or positive licensing scheme.
A positive licensing scheme would require all tobacco retailers to apply for a licence to sell. The trade believes that this type of system would not only be costly and time-consuming for retailers, but would be unfair for retailers who worked hard to restrict underage sales.
A negative licensing scheme would penalise only retailers who repeatedly sold to minors by banning them from selling tobacco for up to one year. A decision is due in the next few months.
While much of this legislation hangs on the outcomes of consultations, one thing is for certain: 2008 is going to be a crucial year.