€100 million in unintended consequences

| April 7, 2017

France photoFrance – presumably in the form of French taxpayers – is having to pay about €100 million to tobacconists to buy up unsold branded tobacco packs that do not comply with a law on standardized tobacco packaging, according to a story in The Local France.

When France made the switch to standardized tobacco packaging in January, the government was forced to buy the branded packaging that tobacconists had not sold.

This stock amounted to 250 tonnes of branded products, made up of 15 million cigarette packs and loose tobacco packs that had been rendered unusable by the law.

The law bans eye-catching branding and logos, and requires that packs are of a uniform size and color. Brand names remain, but appear in a small, uniform font.

The process of compensating retailers was complicated by the fact that the authorities decided that the tobacconists needed to provide information about where they had purchased their cigarettes. This was reportedly because some cigarette sellers allegedly tried to cheat the system by sending in cigarettes that had been smuggled from elsewhere.

Some 40 workers with the cigarette distributor Logista are sorting through the cigarettes and paying for them in a process that is expected to last until May. Logista will then be reimbursed by the government, which will in turn get rid of the 15 million packs by burning them.

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Category: Breaking News, Financial, Packaging

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