Stage one of plain packaging – ‘business as usual’

JTI’s Jeremy Blackburn and Jonathan Yajima tell Neighbourhood Retailer it’s ”business as usual” for retailers ahead of new tobacco rules

Uncertainty among retailers ahead of plain packing and other changes to tobacco sales has sparked a new initiative by a major tobacco brand.

As the new EU Tobacco Products Directive (TPD2) legislation draws near, JTI launched its ‘Your Guide Through Change’ programme, giving retailers a source of reliable advice on handling the changes.

Jeremy Blackburn, JTI’s head of communications, and its head of customer marketing Jonathan Yajima spoke to Neighbourhood Retailer about the launch.

“We’re trying to make the changes simplistic and helping retailers work their way through these new rules,” Jeremy said.

“We had a lot of success working closely with retailers on the changes to displays and gantries, and we want to continue providing a high-level of assistance through the next set of changes too.”

Jeremy and Jonathan explained tobacco still represents a major cash generator, responsible for an average of 16.9 per cent of revenues. A significant footfall driver, regular tobacco shoppers can be worth over £2,000 per year.

They said the transition to plain packaging would take place over three stages, and the current phase was ‘Business as usual’.

“We’re now in stage one – don’t do anything,” Jeremy said. “Phase two is ‘Be ready’, when retailers should be reducing their stocks of non-conforming packs. The last phase is ‘Be compliant’, when all old packs should be sold through.”

There are a number of key milestones along the way. This May is the manufacturing deadline, representing the final opportunity to manufacture packs of less than 20 ready-made cigarettes and packs less than 30g of roll your own tobacco.

May 2017 will be the sell-through deadline, when those smaller packs can no longer be sold in the UK.

It’s also the date when standardised pack design comes into force, and shape, size, materials, and opening mechanisms must all conform to one pre-decided format.

For example, side-sliding packs will no longer be permitted to be sold from that date.

JTI, along with other tobacco manufacturers, are currently challenging plain packaging in the courts and an outcome is expected shortly.

The uniformity of packaging is however, still subject to legal contest.

JTI, along with other tobacco manufacturers, are currently challenging plain packaging in the courts and an outcome is expected shortly.

Along with objections against the loss of copyright and trademarks, a number of cigarette manufacturers believe standardised packs will be a win for the illicit market. The manufacturers have also cast doubt on evidence that plain packs reduce consumption.

According to Jeremy, even the new pack sizes have legal implications.

“Alongside the effect on retailers from the new pack sizes, there will also be an impact on the illegal trade,” he said. “The implications for the illegal trade are concerning because the bigger packs will mean a minimum pack price of £9 or £10. Illicit sellers will be able to sell at much less than that, so we don’t know what the impact will be.”

On May 2019, track and trace security features kick-in, aimed at cutting down on the amount of illicit trading. Then finally, May 2020 sees the ban on Menthol cigarettes begin.

While it’s important to keep the timetable in mind, Jeremy said the most important things for retailers was to maintain ranges and keep availability.

“Don’t give reasons to tobacco customers not to trust your store,” he said. “If your range or availability isn’t there, they will seek out somewhere else, and you’ll lose that customer.”

JTI’s plan involves providing online training modules, educational videos (above), and information packs through the new JTI Advance website (www.jtiadvance.co.uk).

Acting as a back-up to their sales service, the site features step-by-step guides and valuable information to help retailers through the transition.

The company is also upskilling its award-winning sales force to deliver expert category management advice and support.

“We’re taking a really collaborative approach with retailers, and we’ve built up the JTI Advance site,” he said. “Some 16,000 people have now signed up to it.”

The JTI team have asked retailers to use the principles of ARTIST, with a particular focus on availability – the ‘A’ – and range – the ‘R’ to manage the category successfully.

The acronym’s first ‘T’ is training, and JTI ask retailers to ensure staff are well trained on the law surrounding the sale of tobacco.

According to JTI, training is a crucial part of keeping staff and customers informed about the changes.

“There needs to be experience at the point of purchase, and staff need to know what information to give customers from day one,” Jeremy said.

“If a customer comes in asking for ten Benson and Hedges only to be told ‘we haven’t got them’, that customer is likely to turn around and walk out without buying anything.”

According to JTI’s statistics, some 26 per cent of customers will simply turn on their heel if their brand isn’t available and not buy anything.

Jeremy added: “Staff should be able to say, ‘ten Benson and Hedges are no longer available, but we have got X, Y, Z.

“Ensuring expertise is available at the point of purchase and at the till will be key.”

Johnathan said: “There are lots of learning curves for everyone involved in this. But retailers should rest assured that help is at hand and there will be a number of channels explored to provide them with the assistance they need.”

Worth £15 billion a year the UK tobacco market, remains a pivotal category for many retailers.

JTI have produced a colourful video explaining the deadlines and best practices to adopt to manage the changes. Available at the JTI Advance website, the short film illustrates the legislative changes, and reinforces the different phases of action retailers need to take.

They can also speak to their local JTI representative or call the JTI Customer Careline on 0800 163 503 to arrange a visit.