‘Illogical’ plain alcohol labelling would hit drinks industry for £350bn

By Stuart Stone contact

- Last updated on GMT

Drawing a blank: ‘there is no logical or reasoned argument for plain packaging of alcohol’, according to the Portman Group’s John Timothy
Drawing a blank: ‘there is no logical or reasoned argument for plain packaging of alcohol’, according to the Portman Group’s John Timothy

Related tags: Art, Beer, Alcoholic beverage

The extension of plain packaging laws to alcoholic and sugary beverages would cost the global drinks industry more than £350bn, Brand Finance has estimated.

After the UK became the first country in Europe – and second in the world, behind Australia – requiring cigarettes to be sold in plan, standardised packaging, bodies including Public Health England and the Institute for Public Policy Research have called for the same restrictions to be extended to alcoholic and sugary drinks.

However, business valuation consultancy Brand Finance’s Plain Packaging 2019​ report has found that such measures could cost the global drinks industry more than £350bn – highlighting that drinks giants such as Heineken, AB InBev and Pernod Ricard would see 100% of their revenue exposed to the legislation.

“Since we produced the first Brand Finance Plain Packaging​ report in 2017, a number of other countries have either implemented – or legislated for – plain packaging for tobacco products,” Brand Finance’s CEO David Haigh explained.

“With health advisers labelling obesity ‘the new smoking’, it is not surprising that there have been repeated calls for this type of legislation to be expanded into the food and drinks sectors. It is obvious, however, that this would severely damage these companies’ business values.

“However, the predicted loss of brand contribution to companies at risk is just the tip of the iceberg. Plain packaging would also lead to losses in the creative industries, including design and advertising services that are heavily reliant on FMCG contracts.”

Rebrand

Buying with the eyes

The importance of vibrant pump clip, can and bottle art in the on-trade has come into focus this year through a number of high-profile brand redesigns. These include modern makeovers for historic beers such as Hobgoblin​, Shepherd Neame’s Spitfire​ and Greene King-made Old Speckled Hen​ alongside revamps for more contemporary brews from the likes of Gipsy Hill​.

Discussing the importance of beer branding, Bath Ales’ head brewer Georgina Young – who joined the St Austell-owned company from Fuller’s in May​ – told The Morning Advertiser​: "I think everyone drinks with their eyes. I personally don't like tap walls that come out of just plain tiles, I think what's next to that tap is really important.

“We've just rebranded two of our keg beers – Monterey which is a 3.9% ABV pale ale – obviously it looks very Californian as the name implies and is very tropical – and Cubic. It's the same taste, but the sales of both of those have gone up.”

What's more, commenting on the importance of beer branding​ in June, Watneys Beer director Nick Whitehurst explained: “There are a small group of people that do care and they're catered for really well but actually people go into a bar and the vast majority of people buy brands. They've got a small portfolio that they recognise, trust and look for.

“That's why BrewDog, Camden, Meantime and lots of craft brands do so well – it's the brands that shine through and are going on to get big distribution wins with big retailers.”

Gipsy Hill

Damaging and costly

“Plain packaging would be hugely damaging to independent craft brewers who rely on their designs to set themselves apart,” Barry Watts, head of public affairs & policy at the Society of Independent Brewers (SIBA), commented.

“There is scant evidence that plain packaging would have any effect on reducing serious alcohol harms.

“SIBA helps our members comply with industry standards with a comprehensive labelling guide for packaged beer, which covers everything from environmental and recycling symbols to proper terminology around ABV and allergens.

“Changing beer labels has a significant cost impact for independent brewers, and standardised ‘plain’ packaging makes people less inclined to move away from the global brands they recognise, ultimately reducing consumer choice.

“SIBA members can be innovative and exciting with their beer branding while adhering to the strict guidelines already in place and we strongly believe that plain packaging would undermine our members’ businesses, drive down consumer choice and lead to independent brewery closures.”

Penalising a creative industry

“There is no logical or reasoned argument for plain packaging of alcohol,” Portman Group chief executive John Timothy added.

“Such measures would penalise an innovative and important UK industry, especially the smallest producers, while doing nothing to change the behaviour of those people that misuse alcohol.

“We have, in place, a long-established and effective system of industry self-regulation that ensures labels are appropriate and socially responsible.

“The vast majority of the UK adults that choose to drink do so responsibly and within the chief medical officers’ low-risk drinking guidelines.

“If we are to make progress in further reducing harm, we need to work in partnership with the Government and the public health community to bring forward targeted and tailored interventions.”

Related topics: Marketing

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