Demerits of the New Tobacco Legislation and Effect on the Supply Chain for Cigarettes
DEMERITS OF THE NEW TOBACCO PACKAGING LEGISLATION
Effect on the supply chain for cigarettes
Small tobacco farmers stand the chance of being impacted severely, as they may lose revenue in the long run due to the gradual decrease in the proportion of smokers. This will eventually lead to unemployment and a major dent on national economies for countries like Cuba, were tobacco is a major source of national income (CIA World Factbook, 2012). Warehouses that are designed specifically for the storage of tobacco will have to downsize or possibly shut down due to the decrease in supply, caused by the decrease in demand for cigarettes. Tobacco companies will be affected in many major ways, apart from the negative association that consumers will develop between the graphic images, and the particular brands of cigarettes. As profits will inevitably decline in the long run, many jobs in production will be lost. Marketing departments will become expendable due to poor product differentiation, imposed upon the entire industry by the law. Private investors will also pull out due to poor returns. Independent suppliers, who may provide packaging among other things, will become a competitive industry due to all packaging looking exactly the same apart from the small branding in text, resulting in a few well established competitors thriving while many others shut down. Wholesalers will lose out in the long run as sales decline due to the decrease in the proportion of smokers. Retail stores may have a major problem apart from the decrease in sales. The graphic images on the packaging will definitely be an unsavoury sight to customers browsing through the aisles of the stores, and may cause them to steer clear of that particular area or even of the store itself, resulting in further decrease in revenue.
The fact of the matter is that the entire supply chain will be affected by the new packaging legislation, which will in turn lead to mass unemployment, profit losses, and
Effect on the supply chain for cigarettes
Small tobacco farmers stand the chance of being impacted severely, as they may lose revenue in the long run due to the gradual decrease in the proportion of smokers. This will eventually lead to unemployment and a major dent on national economies for countries like Cuba, were tobacco is a major source of national income (CIA World Factbook, 2012). Warehouses that are designed specifically for the storage of tobacco will have to downsize or possibly shut down due to the decrease in supply, caused by the decrease in demand for cigarettes. Tobacco companies will be affected in many major ways, apart from the negative association that consumers will develop between the graphic images, and the particular brands of cigarettes. As profits will inevitably decline in the long run, many jobs in production will be lost. Marketing departments will become expendable due to poor product differentiation, imposed upon the entire industry by the law. Private investors will also pull out due to poor returns. Independent suppliers, who may provide packaging among other things, will become a competitive industry due to all packaging looking exactly the same apart from the small branding in text, resulting in a few well established competitors thriving while many others shut down. Wholesalers will lose out in the long run as sales decline due to the decrease in the proportion of smokers. Retail stores may have a major problem apart from the decrease in sales. The graphic images on the packaging will definitely be an unsavoury sight to customers browsing through the aisles of the stores, and may cause them to steer clear of that particular area or even of the store itself, resulting in further decrease in revenue.
The fact of the matter is that the entire supply chain will be affected by the new packaging legislation, which will in turn lead to mass unemployment, profit losses, and