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Recently the Lithuanian Government agreed that in autumn cigarette packages sold in Lithuania will need to be marked with graphic pictures showing the dire health consequences of smoking. This is assumed to dissuade people from smoking.
Generally speaking, there is no clear evidence that graphic health warnings, however ugly, have a significant discernible impact on the behaviour of smokers. Taking into account that such law on graphic health warnings came into force in the neighbouring Latvia in 2010 it is likely that the potential effect of this law in Lithuania might be similar.
According to Eurobarometer research on Tobacco Packaging Health Warning Labels that took place in 2012, a number of respondents in Latvia agreed that textual warnings without graphical health warnings have much less impact. Reports also find that in Latvia, respondents talked about turning the pack over to avoid the shocking images. According to the same report, some respondents in Latvia find graphical health warnings less provocative over time.
It is also worth noting that there was a sharp increase in illicit trade in Latvia throughout 2008-2010 in the aftermath of financial crisis. In 2010 illegal cigarettes accounted for 54% share of total cigarettes volume in Latvia, therefore, consumers sensitive to graphical warnings could have easily switched to illicit cigarettes to avoid them. Even though the share of illicit trade continued to grow in 2010 after the new law on graphic images came into force, there is not enough information to support the theory that it was partly a consequence of the new graphic warnings, rather than the ongoing negative effect of the economic downturn. According to Euromonitor International, illicit trade was declining in Latvia starting from 2011 and onwards, demonstrating that there is no or very little direct correlation between graphic health warnings and illicit trade.
Share of illicit trade in Lithuania is considerably lower compared to Latvia (27% in 2014) but illicit cigarettes still could be perceived as a potential alternative for smokers who want to avoid unpleasant graphic images. However the example of declining trend of illicit trade in Latvia shows that the likelihood of consumers completely switching to illicit trade after graphic health warnings are introduced is rather low.
According to the Latvian State Revenue Office, graphic health warnings negatively affected wholesale trade of cigarettes in the immediate aftermath of the introduction of the law, as retailers refused to order new cigarettes until old stock without the graphic pack health warnings was sold out.
Companies will obviously have to sell off cigarettes in old packaging before the new law comes into action, therefore it is likely that throughout the upcoming year we might see a number of promotions and discounts which will be focused on selling old type packs. On the other hand, we can also expect some price increases related to the increasing costs of new packaging with graphic health warnings that will put additional burden on the final consumer.
Overall, global practice shows that introduction of graphic health warnings is more focused on decreasing the number of potential smokers that have not yet started to smoke, rather than affecting those, who are already a part of smoking population.