1. Leon Louw The Regulated Consumer Media Briefing

2. Content Principles: basic consumer rights Nanny state: cost-benefit trade-offs; unintended consequences Implications: freedom, dignity, satisfaction Specifics: Health, safety Specifics: Finance, gambling General: Conclusions, way forward 3. Puritanical mindset Sin tax is health and satisfaction tax Freedom, pleasure, satisfaction, happiness have zero value Benefit denialism 4. 10 basic consumer rights 1. Freedom of choice 2. Information (advertising, marketing, labelling). 3. Warnings (known risks) 4. Attractive packaging, display 5. Free competition, innovation 6. Funds, sponsorships from lawful enterprises 7. Education, advice, persuasion 8. Empowerment, dignity, respect 9. Informed choices regarding trade-offs 10.Accessibility, product range, payment options. 5. Always subject to: 3rd party protection Education, persuasion 6. Which consumers are affected? The poor / vulnerable consumers are by far: most in need of protection most harmed by controls/taxes The poor: are more easily cheated pay more tax because they consume more sin pay regressive tax because their money has higher marginal value have less access to outlets/facilities have more unhealthy habits are less informed by labels, warnings, ads 7. Legitimate consumer choices Pleasure/satisfaction/happiness Convictions (prayer, no surgery, no medication, CAMS) Unhealthy lifestyle (eg lazy, sedentary, obese, risky) Junk food (sugar, carbs, salt, preservatives, flovourants) Red meat, fat, dairy products Carcinogenic cooking Refrigeration (versus fresh; promotes bacteria) Gambling (including entrepreneurship, speculation) Liquor, tobacco (subject to 3rd party protection) Alternative health (CAMS, meditition, traditional) 8. Legitimate limitations 3rd party rights Food/equipment (disclosure / warnings) Externalities (public offense, environment) Children (protection, age restrictions) Weapons (not weapon-specific eg criminal record) Liquor (not liquor-specific eg driving, abuse, occupation) Tobacco (not tobacco-specific eg 2nd hand smoke, fire) Occupations (not substance-specific eg liquor, drugs) 9. Lifestyle Health care (costs, options) Diet Exercise Sex Information (marketing, packaging, display) Competition (ditto) Access (outlets, licensing) Appealing (ditto) Non-legitimate limitations 10. Inevitability of domino effect Bread, biscuits, cakes Flour, wheat Dairy products (especially cream, butter, fatty cheese) Rice, potatoes Exercise Sex Values, ethics Big Brother social engineering Whats next? 11. Anti-consumer proposals Demarcation Medical schemes Minimum benefits = maximum cos Community rating/social solidarity = discrimination against healthy people Supermarket solidarity Uniform commissions = denial for poor Insurance No health cover Cash payments on event regardless of cost Maxima R3000/m + R50000/a 12. Junk food: Age restriction Advertising / marketing bans Product controls: Cold drink size Sales to fat children Salt (food/flavour limits, tax) Sugar (tax, age restriction on sweets, cold drinks etc) Tobacco (packaging, graphics, display) Liquor (ads, age to 21) Anti-consumer proposals 13. Assume unhealthy living imposes net costs: No excuse for limiting consumer rights Thin edge of the wedge problem Assume net surpluses: Tax versus spending Unhealthy people subsidise healthy Early mortality saves social spending Senior citizen discounts Sponsorships, subsidies etc Health care costs 14. The salami technique 3rd party protection Warnings Taxes Controls Prohibition (tobacco-free planet by 2040) It started with tobacco 15. Tobacco proposals: Public (ie private) place ban forces smokers from private to public places productivity? children; domestic workers? 10m ban? Implications for poor/high density areas Display ban Beach ban Plain packaging; graphic iamages Current concerns - tobacco 16. There are no tobacco controls or taxes! All controls/taxes are people controls/taxes Once principle conceded on tobacco consumers, no rational defence against total control World closing-in on consumers: Liquor, salt, fast food, sugar (new tobacco), CAMS, health cover Credit, low prices Tax discrimination Tobacco specifics 17. WHO exceeding mandate/expertise Recommendations are obligations Fiscal policy Regressive tax Budgetary policy Criminal law and procedure Social engineering/behaviour modification Erosion of consumer rights Erosion of property rights 18. Concerns One-size-fits-all Compromising separation of functions Legitimising discrimination Legitimising authoritarianism no mention of lifestyle rights, consumer rights, property rights, freedom of association, civil liberties, due process etc 19. Economics of sin tax No such thing as a free lunch (TANSTAAFL)! Elasticity determines tax impact Only marginal consumers have elasticity Tax diverted from?: Known high elasticity (vegetables, health care!) Time preference (short vs long term) WHO wants it both ways, higher tax: Reduces smoking Increases revenue WHOs factual and logical errors (eg ITIC critique) 20. (Un)intended consequences Tax evasion Illicit trade Victimising the vulnerable: Psychological aspects Social aspects Anti-poor discrimination 21. Social costs Who subsidises who? Tobacco, liquor etc revenue vs social health spend Consumer spending funds facilities Life expectancy vs old-age costs 22. Misleading terminology Tobacco tax = consumer tax Tobacco control = consumer control Ant-tobacco = anti-smoker Public place = private place 23. Conclusions and recommendations Require WHO to honour mandate/expertise Recognise/resist WHO anti-consumer ideology Disregard non-health adventurism Adopt country-specific policies Consider implications: Other contexts Counter-productive effects 24. Rights must be balanced (seduction vs rape) Unhealthy choices have no benefits Net social costs Consumer stupidity Red herrings/lies 25. Separation of powers (1; law by decree) Dignity (1) Rationality (1) Association (8) Fair and reasonable (32) Public participation (195) General application (25) (equality between products and risks) Constitutionality 26. Way forward? Consumer movement mobilisation Workshops, meetings, conferences Media information Regulatory Policy Unit in FMF? 27. No more heads in the sand? 28. No more following the crowd 29. End The Regulated ConsumerThe Liberated Consumer