Ban on tobacco advertising: what are the consequences for Switzerland?

On February 13 in Switzerland, a popular initiative, entitled "Children without tobacco" will be submitted to a vote, in order to ban "all forms of advertising that reach children and young people". While the measure has received strong support from health and public health stakeholders in Switzerland, it has nevertheless aroused hostility from the tobacco industry and some political decision-makers associated with economic circles. In an article published at the end of January, Agefi looks at the weight of cigarette manufacturers in the Swiss economy, as well as the supposed economic consequences if such regulations were to be put in place.

In Switzerland, the federal popular initiative gives citizens the opportunity to propose an amendment to the federal constitution. Once submitted, the people behind the popular initiative have 18 months to obtain the handwritten signature of 100,000 people with the right to vote. If the project is successful, the initiative is put to a vote by the entire Swiss people.

The popular initiative "Children without tobacco" being judged by some political decision-makers as going "too far", The government and the federal parliament are opposing this proposal with a more permissive counter-proposal., by allowing manufacturers to advertise on the Internet, on social networks, in newspapers, at points of sale, as well as at festivals.

The relative weight of the tobacco industry in Switzerland

In an attempt to put pressure on the popular initiative, the tobacco industry is using its considerable weight in the Swiss economy. As highlighted in a study produced by the auditing and consulting firm KPMG on behalf of Philip Morris International, the tobacco industry's activity in Switzerland represents 11,500 direct and indirect jobs. However, according to the Federal Statistical Office (FSO), the cultivation, production and distribution of tobacco accounts for 4,271 jobs in Switzerland, which is much less than 0.1% of the Swiss working population.[1].

Advertising restrictions could be good for the economy

In a communication to the newspaper, Philip Morris Switzerland also warned: "If the initiative were accepted, it would probably not be without consequences for employment." Opponents of the popular initiative emphasize in particular that Switzerland's particularly favorable regulatory framework contributes to its attractiveness and dynamism, and that as such, the public health measure could weaken the country's attractiveness for cigarette manufacturers. In reality, as the OxySuisse association mentions[2], only a quarter of cigarettes manufactured in Switzerland are destined for the local market, while the majority of employees in the country's tobacco sector are dedicated to international operations. The ban on advertising aimed at young people could result in a gradual reduction of 7% in tobacco consumption in Switzerland, which could threaten at most 200 jobs in the sector. However, by freeing up purchasing power, this measure could, through a transfer effect, encourage the creation of 3,000 additional jobs in Switzerland.

The tax burden of smoking in Switzerland

Similarly, the tobacco industry seeks to highlight the importance of its activity in terms of tax revenue. Thus, for Patrick Eperon, political delegate of the Employers' Centre, "PMI is the largest tax contributor in Neuchatêl". However, while KPMG estimated the tax revenue attributable to the tobacco sector at 2.45 billion Swiss francs in 2016, the Winterthur Institute of Health Economics estimated that, in the same year, the health cost of smoking in Switzerland alone amounted to three billion francs, to which must be added another two billion francs due to sick leave and loss of productivity. Furthermore, this calculation does not include the environmental costs linked to the tobacco industry (water pollution, cigarette butt collection, etc.).

The “slippery slope”, a refrain from manufacturers to block regulations

For Damien Cottier, national advisor of the Liberal-Radical Party, "the media, festivals, kiosks and gas stations will be impacted." With 9.7 million francs of investment per year, the tobacco industry would represent 0.2% of the country's advertising expenditure. Furthermore, according to the newspaper, communication and marketing organizations would fear an opening to other bans such as those on sausage, sugar or alcohol.

The use of the "slippery slope" or "domino effect" argument, which suggests that the introduction of a tobacco restriction will pave the way for a succession of similar regulations on other products, is a recurring phenomenon. In the area of advertising in particular, there is no evidence to support this claim. Furthermore, a large number of European countries have already introduced a total ban on tobacco advertising, without having to deplore any particular negative economic consequences.

FT

[1] Agefi, Tobacco industry: what the numbers say, 26-27/01/2022, (accessed 31/01/1994)

[2] The president of the OxySuisse association is Pascal Diethelm, also vice-president of the National Committee against Smoking, which is the leader of the platform. Tobacco-free generation.