Plain packaging would hit alcohol brands hardest, claims new research
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Alcoholic and sugary drinks are the categories most vulnerable if a policy of plain packaging were introduced.
This is the finding of recent research by Brand Finance following the introduction of plain packaging for tobacco in a number of markets around the world, which looked into the impact of the introduction of a similar policy on drinks.
The research found that implementing such an initiative would cost the drinks business an annual $300bn globally. However, according to Brand Finance, brand values have grown over the past two years and companies have become more reliant on their performance, leading the researchers to up their estimate by almost 50% to a $400bn hit.
In 2012 Australia became the first country in the world to introduce plain packaging for tobacco, and since then several other countries have followed suit, including the UK, France, Ireland, Norway and New Zealand. At the same time calls have been made to extend the concept to certain food and drink categories, with Public Health England calling for plain packaging to be considerd for alcohol.
Meanwhile in Ireland the country passed the Public Health (Alcohol) Act which makes health warnings on packaging compulsory.
“To apply plain packaging to alcohol, confectionery, salty snacks and sugary drinks would render some of the world’s most iconic brands unrecognizable,” said Brand Finance. Not only would plain packaging harm a brand’s ability to differentiate itself from other rival products, the value that the brands have would fall as a result.
Brand Finance based their findings on looking into the impact such a policy might have on eight multinational businesse including Pernod Ricard, AB InBev and Heineken.
“Alcohol beverage giants such as Pernod Ricard, AB InBEv and Heineken would be strongly affected given that all their brands and revenue would be exposed,” said the report.