Wednesday, 24 August 2016

Understanding the Basic Economics of Tobacco Harm Reduction

I'm delighted to have persuaded Carl Phillips to write a paper for the IEA about tobacco harm reduction. As many readers will know, Carl's knowledge and experience in this area is second to none and he is a rarity in the world of 'public health' in that he understands economics. As he said to City AM yesterday...

“Public health people are notoriously economically illiterate. Most of the nonsense in the policy discussion, on all sides, stems from ignoring economics,” said Phillips.

In his discussion paper Understanding the Basic Economics of Tobacco Harm Reduction, Carl looks at nicotine use from the perspective of welfare economics. This is how all other product use is normally looked at, but because most of the people involved in tobacco control have peculiar views, such as the belief that a billion people smoke as a result of some sort of demonic possession rather because they enjoy it, nicotine is usually excluded from conventional cost-benefit analysis.

'Public health' paternalists think that it's their job to assess costs and benefits for other people. However, being fanatics, they don't see any benefits from nicotine consumption and so, seeing only costs, assume that the optimal level of nicotine consumption is zero.

Using rigorous economic logic, Carl refutes that and concludes:

  • Substitution of a low risk product would be welfare-enhancing for most smokers. Some smokers will still prefer smoking to any available alternative, despite the much higher risk. But there are vanishingly few smokers for whom abstinence is a better choice than switching to a low-risk alternative. Thus there is no apparent ethical justification for anti-smoking measures that push for abstinence rather than switching.
  • The availability of low-risk tobacco / nicotine products will inevitably increase total consumption as compared to a world where cigarettes are the only option. This is the inevitable and rational effect of lowering the costs of a consumption choice. It is properly counted as an additional benefit, though it is widely derided as a cost. Public supporters of low-risk products who condition their support on those products not attracting any new users are either being naïve or cynically imposing conditions they know cannot be met.
  • For any remotely defensible goal, including minimising population health risk, the optimal level of excise tax on low-risk products is zero (assuming that is the lower bound; a subsidy would be better still). This is sometimes presented as if it were immediately evident from the comparative risk, but that is not actually a valid claim. However, simple economic analysis shows that it is the case.

You can download if for free here. Please do.

You can also read Carl's article for the City AM here.

Monday, 22 August 2016

That Canadian minimum pricing claim

From the Journal (Ireland), a pleasing rarity - a journalist who knows how to assess evidence. It all started with a clueless/lying politician...

"Minimum unit pricing has been proven to work, in British Columbia in Canada, for example. When they introduced it, they found, when they did the research that there were less deaths from…drinking, and there were less hospital admissions."

This is one of the most audacious lies I've ever come across in 'public health' and that is not a claim I make lightly. It started life in a ludicrous study from that old crank Tim Stockwell and has been repeated ad nauseum ever since.

The statement that alcohol-related deaths dropped by 32 per cent in British Colombia between 2002 and 2009 seems like a normative claim. It's not. There was never any drop in deaths and so Stockwell created a model that pretended there were. This is what 'public health' people do. They create a land of fantasy for themselves where their ridiculous policies work.

I have written about this farce of a study before, but the Journal has the most comprehensive take yet. Do read the whole thing, but here's a taster...

The first thing to note is that the number of alcohol-related deaths and hospital admissions generally went up in British Columbia during the period of 2002 to 2009.

As you can see, there were only two occasions when the number of deaths was lower than the year before, and the number of hospital admissions rose every year.

...It is doubly wrong to say that this happened “when they introduced [MUP]“. As we’ve explained, this study relates to increases in already-existing minimum prices.

...Remember that the study uses complex statistical models to estimate an association between a 1% increase in minimum prices, and a percent change in the number of deaths.

It’s not saying that prices actually went up by 1%, and these were the actual, observed ensuing increases and decreases in deaths.

If that’s a bit confusing, welcome to the world of statistical models.

It certainly is a bit confusing when 'public health' campaigners make up historical facts to suit their agenda, but it is hardly the first time. Models have their place in making predictions but using a model instead of using readily available data about a past event is, well, cheating.

Read it all here. There is also a pretty good overview of the sugar tax evidence from the same people here.

The silly, silly sugar levy

I've been looking carefully at the details of the proposed UK sugar levy and have written up my conclusions in a short IEA briefing paper. It is a truly perverse and counterproductive idea which will cost the government more than it yields and will have little effect in incentivising reformulation because the reformulation has already taken place.

Here's the executive summary...

In March 2016, George Osborne announced a ‘sugar levy’ on soft drink companies to start in April 2018. Under this policy, companies will be taxed on sales of medium and high sugar drinks (excluding fruit juice and milk-based drinks).

As an anti-obesity policy, the sugar levy seems arbitrary. Consumption of both sugar and sugary drinks has been falling for years while obesity has been rising. Soft drinks make only a small contribution to average calorie intake. Comparisons between European countries show no correlation between sugary drink consumption and obesity.

There is unambiguous evidence that ‘sin taxes’ of this sort take a greater share of income from the poor than from the rich. Since low income groups tend to buy larger quantities of SSBs, the impact of the sugar levy will be particularly regressive.

The Office for Budget Responsibility says the levy will increase inflation by a quarter of a per cent in 2018-19 thereby adding £1 billion to accrued interest payments on index-linked gilts. The inflationary effect will raise the cost of index-linked salaries, pensions and benefits by many millions of pounds. The levy will also require additional funding for enforcement and administration. For the first few years, at least, the sugar levy will be loss-making.

Hopes of extensive reformulation to reduce sugar content in the soft drink market are highly unrealistic. There is no more sugar to be removed from diet drinks and companies will not change the recipe of their popular original brands. Instead, the levy gives companies the perverse incentive to raise sugar levels up to the threshold of each tax bracket.

It is bizarre to introduce a tax when you know that it will incur billions of pounds of additional costs, and the stated objective of getting soft drinks companies to reduce the amount of sugar in their products is a pipe-dream.

50 per cent of the carbonated drinks market is already made up of low calorie brands. Regular Coke and Pepsi make up a further 24 per cent of the market - and they are not going to be altered. That leaves only a quarter of the existing market that could plausibly be reformulated but it includes such brands such as Irn-Bru and Dr Pepper which are unlikely to change (both have diet versions that sell modestly) as well as brands such as Lilt and Oasis which have already been reformulated to bring them below the lower-tier 5g/100ml sugar limit. For the latter category, the levy provides no incentive to reduce sugar levels further. On the contrary, since consumers tend to prefer the taste of sugar to the taste of artificial sweeteners, the levy gives manufacturers a perverse incentive to raise sugar levels in reduced-sugar drinks up to the limit of whichever tax bracket they are in.

I think the sugar tax is a bad idea on principle but it also happens to be a terrible idea in practice.

I've written more about this for Spectator Health.

Friday, 19 August 2016


The fall out from the obesity strategy continues with Action on Sugar now telling the government that they should listen to big business.

This is because the CEO of Sainsbury's has written a letter to The Times asking the government to bring in legal restrictions on the use of salt, sugar and fat 'across the whole food and drink industry'. It's a staggering thing to request and is a classic example of industry trying to use regulation to get an advantage at the expense of the public. Or maybe he knows it won't happen and is counting on some good publicity. Either way, I hope his business tanks and he gets thrown out on his ear.

Elsewhere, I've written an article for the Express about the cry babies of the nanny state industry and their ridiculous demands. In it, I say...

A glance at the policies rejected by the Government demonstrates sound judgment from the Prime Minister. The health lobby wanted a ban on “junk food” advertising before the watershed. Alas, “junk food” is a campaigning term with no scientific definition.

The nearest equivalent is food that is high in fat, salt or sugar (HFSS) but this covers a much broader range of products than people realise. It includes chocolate, crisps and burgers of course but it also includes orange juice, cheese, bacon, nuts and milk.

Call me a free market fundamentalist if you must but I don’t think these products are such a threat that they can only appear on television after dark.

Illustrating this point is an excellent video courtesy of Guido showing dozens of reasons why Jamie Oliver's adverts for, er, Sainsbury's would be banned if the zealots got their way. Highly recommended.

They know not what they do, the irresponsible fools.

Thursday, 18 August 2016

There's no pleasing some people

As predicted yesterday, the 'public health' racket are engaging in a massive fit of faux-outrage today as a result of the government not capitulating to all of their ridiculous demands. At least I hope it's faux-outrage. It certainly should be. The anti-sugar nuts have achieved more than they could possibly have dreamed of a year ago, as I say in my new post for Spectator Health. Do have a read of it.

The least surprising tweet of day came from Sarah Wollaston who is making the usual claims about big business dictating government policy (see also minimum pricing and plain packaging). If she has an allegation to make, perhaps she should make it explicit rather than use weasel words? It obviously hasn't occurred to her that Theresa May, unlike Wollaston, may actually be a conservative.

The government has given the fanatics their sugar tax and their 20 per cent sugar reduction pledge. They are still throwing their toys out of the pram and they always will. The lesson for the government is clear. These people moan whatever you do, so don't do anything for them in the future.

Wednesday, 17 August 2016

The lunatics in charge of the asylum

The fanatics are running the show in Scotland, as The Drum reports...

Scottish government officials will meet with the Advertising Association (AA) and Portman Group to outline their plans for reforms to alcohol advertising. But the real question likely to be on the minds of those representing advertisers is why a committee advising the government on those reforms is made up almost entirely of temperance campaigners.

You may recall something similar happening with the committee put together by the Chief Medical Officer to discuss the risible new drinking guidelines.

It is the Scottish government's first official encounter with the ad industry on the matter since it quietly formed an international group of experts (see below) at the turn of the year to advise it on tougher advertising measures. The move happened despite concerns over the group's constituents from at least one of the major alcohol producers. The fear being that the panel, which consists of health and marketing experts such as Gerard Hastings, professor of social marketing at Stirling University and Karine Gallopel-Morvan, professor of social marketing at the School of Public Health, is one-sided and could help push through tougher measures in the next phase of the Scottish government’s framework, according to a source close to the matter.

Regular readers will know that Hastings is a highly emotional, far left-wing fruitcake whose hatred of advertising is only matched by his incomprehension of it. Check out the presentation he gave to a government-funded temperance conference last year. Click on the link. Look at it. This is a guy who should be shouting from the sidelines at a Corbyn rally, not getting invited to policy meetings. And yet - almost unbelievably - this who the World Health Organisation went to when they wanted a review of the evidence on food advertising and he is the go-to man for 'public health' lobbyists when it comes to alcohol advertising. Perhaps this is not so surprising as he can be relied upon to demand a ban regardless of what is being advertised.

It doesn't stop there. Other alleged experts on the Scottish government's panel include...

Colin Shevills, director of 100% state-funded anti-alcohol pressure group Balance.

Sally Casswell, Kiwi 'public health' fanatic, wibbles about corporate power, denormalisation, people vs. profits etc.; wants 'comprehensive' alcohol advertising ban, natch.

Katherine Brown, director of the neo-temperance Institute of Alcohol Studies (formerly known as the UK Temperance Alliance)

Eric Carlin, director of the state-funded 'public health' sock puppet SHAAP

Peter Rice, chairman of SHAAP

Suzanne Costello, chief executive of Alcohol Action Ireland - a sock puppet pressure group set up by the Irish government specifically to lobby for its Public Health (Alcohol) Bill.

Mary Cuthbert, board member of Alcohol Focus Scotland - a campaigning 'charity' that is almost entirely funded by the taxpayer.

Mac Armstrong, chair of Alcohol Focus Scotland.

Mike Daube, formerly of ASH (UK), now a jackboot of all trades in Australia; denies that moderate drinking is good for you; got an operatic production banned because it was set in a tobacco factory.

Niamh Fitzgerald, one of Hastings' colleagues at the University of Stirling, UK Centre for Tobacco and Alcohol Studies.

Amandine Garde, lawyer, big fan of using EU law to regulate people's lifestyles.

Mariann Skar, secretary general at EU-funded teetotal group Eurocare.

Looking at the full list, I can't see anybody who is likely to demand anything other than an extensive ban on alcohol marketing. Not one of them works in the private sector, let alone in advertising or media.

Health secretary Shona Robison said: “The establishment of this group was a recommendation made by the Universities of Stirling and Sheffield in their independent report which found that the UK government’s alcohol policies are weaker than those implemented by the devolved nations."

Oh, for God's sake! Obviously these people are going to recommend their mates and exclude their opponents. This is Mickey Mouse policy-making of lowest order. It would be better - at least, it would be more honest - for the SNP to abandon the pretense of consultation rather than waste money on this kangaroo court.

Any changes to alcohol advertising that stem from the panel would be a fillip to the SNP, which has taken a hard-line anti-alcohol stance since it came into power in 2007.  

No kidding. It's all about boosting the SNP's prestige, just as the taxpayer-funded jamboree last October was all about Sturgeon-worship, but don't these people feel any shame about running their country like a banana republic?

Friday, 12 August 2016

WHO bans whole countries from its jamboree

The WHO's latest clandestine tobacco control meeting is due to take place in New Delhi in November. Readers may recall that the last shindig (in Moscow) saw a blanket ban on everybody from Interpol to the media - not to mention industry and the public - attending a conference that is paid for by the taxpayer and aims to change government policy.

According to the Huffington Post, the WHO's paranoid obsession with secrecy and censorship will plumb new depths in India as they intend to ban whole nations from attending...

In a document obtained from the FCTC, the organizers ask for support to “ensure the exclusion of representatives and officials from...fully or partially state-owned tobacco industries, including state tobacco monopolies.” Specifically, the FCTC hopes to ban certain “appointed and elected officials from executive, legislative and judicial branches” from the meeting.

This effort to exclude delegates with associations with tobacco production is so broad that it will almost certainly prohibit finance ministers, economic development secretaries, public health officials, and even presidents and prime ministers representing countries that operate state-owned tobacco growing or manufacturing operations, or engage in marketing and trade efforts.

This could mean that nations which account for more than a third of the global population will not be represented...

As a result, countries including China, Cuba, Egypt, Bulgaria, Thailand and even India, the convention’s host country, may have a hard time having delegates approved to attend the event and vote on issues that impact their citizens.

Utter insanity. In politics, it is usually the way that large, official agencies take a sober and restrained view of things while extremism breeds at the margins. The opposite is true in 'public health' where the WHO attracts the most fanatical and least accountable zealots and it is left to domestic organisations to take the edge off the madness.

So, for example, while governments try to mitigate the impact of anti-smoking policies on the black market, the people in the WHO bunker imagine they can eradicate the illicit tobacco trade.

And while governments seek to make health policy without excessive industry involvement, the WHO not only bans industry employees from observing proceedings which directly affect them, but bans everyone but a select handful of true believers from being in the room.

As I said back in 2012...

This is madness. Is there any organisation these maniacs do not suspect are 'front groups' for Big Backy? The real issue here is not allowing the industry—or Interpol—to engage, it is that no opposing views are allowed whatsoever. I don't imagine that the industry necessarily represents the views of its customers, but they represent them better than the people who hate the customers, hate the industry and hate the product. Ideally, I'd like to see the tobacco control "community" invite smokers to their conferences and ask them how they feel about higher taxes and outdoor smoking bans, but they never do. I can't think why.

The result of excluding everybody except fellow fanatics is that you end up with retarded and delusional policies which only make sense at two in the morning when they are being discussed by monomaniacs in the hotel bar.

Now, this corrupt agency wants to extend their prohibition to true believers who happen to come from countries where the state is involved in tobacco production. They have completely lost the plot. Can we stop giving them our money now, please?