There is now less than a year to go until all shops in the UK will be banned from displaying tobacco. Peter Blakemore, managing director of AF Blakemore & Son, says wholesalers are the crucial link between suppliers and retailers, and that they have an essential role to play in making sure their customers transition in the most market-efficient way.
Top Tobacco Tips
- Understand the ban: Make sure your customers know when the ban will affect them and how they need to prepare.
- Availability and range will be critical: Availability and range will become even more important under the ban.
- Brief staff: Your staff will need to be able to speak to customers about preparing for the ban and about the possibility of plain packaging.
- It’s good to talk: Speak to your customers about the display solutions available from groups such as the Association of Convenience Stores.
- Ask suppliers for support: Ask tobacco suppliers for literature that can provide help and advice for retailers when they visit your depot.
- Look at others’ experiences: Consider the effects new legislation has had overseas – retailers now take longer to stock shelves and can make mistakes; consumers may get frustrated by the increased serving time.
Peter Blakemore, MD, AF Blakemore & Son, a Spar and Landmark member “It’s really important that wholesalers work with their customers to make sure they are up to speed on tobacco legislation. We’ve got to work with both suppliers and our customers because we’re the link between them to make sure that they can transition in the most market-efficient way possible.”
On top of this, the government has expressed official support for plain packaging. Make no mistake: the next 12 months will be crucial for the future of tobacco retailing, and it is vital that wholesalers help their customers to get ready. Independent retailers have a range of possible solutions and strategies at their disposal to minimise the impact of the tobacco display ban, and wholesalers need to tell them what these are. Imperial Cash & Carry keeps its customers up to date with weekly mailshots in English and Turkish sent to 1,700 businesses, backed up with texts and emails, to make sure it is reaching retailers in whatever way suits them best. Trade marketing manager Nikkita Mulchandani says: “It’s our responsibility to educate retailers about how to get the most out of their tobacco category and to make sure they are following the regulations.” It has proved an effective strategy for the north London wholesaler and Today’s member – Imperial saw tobacco sales rise following the introduction of the display ban in stores larger than 3,000sq ft in 2012. Mulchandani adds: “One of the most important messages to give your customers is to make sure they are buying their tobacco from a responsible wholesaler who’s buying direct from source, and letting them know they can still make a margin from the most profitable brands.” Asim Sarwar, MD of Scotland-based United Wholesale and chairman of the Scottish Wholesale Association, says there is still uncertainty about what advice should be given to retailers. “We need easy-to-read, easy-to-understand literature to give our retailers more clarity on what equipment will be used to replace current cigarette gantries,” he says. “What will the range look like once we ‘go dark’ and which SKUs should the retailer discontinue?” [pull_quote_center]Talk to your wholesale representatives from JTI. We can provide literature for cash & carry rooms and materials to go up on the walls[/pull_quote_center] To help stores get more from tobacco, last year, JTI launched category management scheme ‘ARTIST’, which focuses on availability, range, training, innovation, sales and technology. JTI head of communications Jeremy Blackburn says wholesalers should use this as a way of educating retailers. “Use that acronym to talk to your retailers and help them,” he says. “Wholesalers need to have a vested interest in availability in terms of telling retailers about the dangers of running out of stock. Also, talk to your wholesale representatives from JTI. We can provide literature for cash & carry tobacco rooms and material to go up on the walls.” For Nisa, 32% of sales come from tobacco and chief executive Neil Turton says there is a danger of complacency ahead of the display ban. “We follow the Association of Convenience Stores’ (ACS) advice particularly,” he says. “We’ll constantly promote the display solutions available from ACS because they’ve been really good with their retailer guides about how to cope with this and how to get your fixtures ready.” He also says that wholesalers should look to reduce retailers’ dependence on tobacco sales in the longer term, to be prepared in the unlikely event that tobacco sales are significantly affected by the display ban. One key lesson Imperial Tobacco has learned from its experiences in Australia is that availability drops when there is a tobacco display ban. Determined to address this problem in the UK, the supplier launched a ranging and merchandising initiative last September and offers a ‘display restrictions update’ guide on its website to help retailers. Peter Whitfield, Imperial Tobacco’s route to market account director, says: “Where possible we have attended both sales team meetings and retailer forums arranged by our distributive partners, and this collaborative approach has allowed us to keep them up to speed with the legislation and help them consider the opportunities over the next year and beyond – namely delivering great customer service and ensuring robust range availability.”
Retailers will need to visit their wholesalers to keep their stockrooms replenished and restock items when they are low on volumes. Making this process as easy as possible for retailers will help wholesalers build closer relationships with their customers, says BAT. [pull_quote_center]Imperial Cash & Carry keeps its customers up-to-date with weekly mailshots in English and Turkish sent to 1,700 businesses, backed up with texts and emails[/pull_quote_center]
On the horizon
The Tobacco Products Directive was passed by the European Parliament in March. The legislation requires an increase in the size of combined picture and text health warnings to cover 65% of tobacco packs, minimum pack sizes of 20s for cigarettes and 30g for rolling tobacco pouches, and a ban on flavourings such as menthol. BAT expects it to be implemented in the first quarter of 2016
Quite apart from the display ban, proposals to introduce plain packaging are now gathering pace in Westminster. Following the review by Sir Cyril Chantler of plain packaging in Australia, health ministers have given the thumbs up for the policy, despite Chantler’s admission that the evidence available on its effects so far is limited. Public health minister Jane Ellison told parliament last month that there would be a “final, short” consultation on plain packaging, which began at the start of this month. This is all despite the evidence that is available from Australia: since the introduction of plain packaging, the long-term decline in smoking rates has tailed off from 3.3% to 1.4% in 2013 and the illicit trade in black market brands such as ‘Manchester’ has grown from 11.8% of total consumption to 13.9%. Catherine Humphreys-Scott, corporate communications manager at British American Tobacco (BAT), says wholesalers must fight to reverse the government’s thinking. She says: “This isn’t over the line yet. What we have to recognise is that the government can still change its mind – it U-turned on this last year and there’s nothing to stop it from changing its mind again.” However, should plain packaging eventually come into effect, retailers will need to keep their shelves stocked up and ensure they’ve got their product range right – not doing so would pose the biggest risk of losing customers. The Federation of Wholesale Distributors says removing manufacturers’ names and brand markings from cigarette packs would burden the trade with costs and confusion, despite the fact that products in wholesale premises cannot influence public attitudes to smoking. Chief executive James Bielby says: “We are concerned the government is pushing ahead with regulation without proper regard to the impact it will have on business, particularly those parts of the supply chain where imposing plain packaging cannot possibly have an effect on smoking levels.” Imperial Cash & Carry’s Nikkita Mulchandani says: “Although plain packaging has not been decided on yet, Imperial always makes its customers aware of how and where they can get involved in the debate and ask their MPs about the issue.”