The consequences of over-regulating, Part 2: Real life example from Finland

A couple of days ago I wrote about the Norwegian Cancer Registry claiming that Finland had managed to lower the number of lung cancer cases without the use of snus and e-cigarettes (http://goo.gl/SeSw3C). I found Finnish vaper jariollikka's comments on this post very interesting. According to his experience and the statistics he provided the use of snus in Finland has not dropped after it was banned in 1995. The sale of snus on the Finnish mainland that was banned in 1995, but it was still legal to import it from Sweden or other neighbouring countries, pretty much the same rules as we have both in Finland and here in Norway on e-cigarettes today. In 2010 Finland also banned importing snus via mail, so now you have to travel to Sweden to get some legally. As I commented on that case it's very interesting to see that the use of snus in the youngest group presented the statistics (http://goo.gl/L7mbhf, look at table 19) seems to get a boost in 2012. This is the weakest group economically and hence the group most likely to turn to the black market for economical reasons. And as jariollikka says, the black market in Finland is thriving and even the police that is supposed to stop this is also buying snus from the black market.

As I mentioned in the first post I wrote about this, a black, and of course totally unregulated, market rising will be one of the consequences of over-regulating a product that is already used by millions of people. The fact that both snus and e-cigarettes are products that the public believe, and science has shown, is life-saving for it's users will amplify this effect. So what was the effect of banning the use of snus in Finland in 1995? This article, http://goo.gl/bPMOT9, published in 2006 on adolescent snus use in Finland 1981-2003 aims "to study changes in adolescent snus use from 1981 to 2003, the effects of the total snus sales ban (1995) and snus acquisition". It concludes that the ban did not stop the use of snus, but instead the already increasing use they had in 1995 continued. It also concludes that the eradication of snus is very difficult, if not impossible in Finland as long as import for personal use is legal and it is still sold in the neighbouring countries (Sweden and Estonia). It shows that instead of slowing down the increase in popularity of snus among 16-18 year old boys in 1995, the highest numbers since 1981 were seen in 4-6 years after the ban. There is several possible explanations for this: It was still easily available due to the fact it was sold on the ferries between Sweden and Finland, increased discussion in the media, increased awareness of the health benefits and price. The fact that it was now forbidden may also have made it more attractive to youth (as I've argued before as well).

The study also shows very clearly how the snus black market in Finland is thriving. Have a look at Table 3 in the article. Although most people say they get snus from friends, family or when travelling to Sweden or Estonia, in the group of daily or occasional users 23.7% say they also get it from "under the counter" in kiosks, stores or service stations and 3.4% also get it from "street vendors". These are the ones I would definitely count as the black market, but also "strangers" and "somewhere else" could be a part of it. So one of the consequences of banning snus in Finland has been a black market. It's also important to notice that the wanted effect, that the use of snus would go down, was not achieved.

One statement in the study caught my attention especially: "In Finland, price policy as a “regulating instrument” is not available because the product is not legally sold". This is is a very important point: You have no way of regulating a black market. Not with prices, not with age-limits and not with safety control of the products. And as the study shows: "Even the youngest age groups are interested in snus if available". The findings leading to this statement is that they observed 12-year-olds experimenting and 1 in 10 of the 14-year-olds had tried it. 

I think this study is an excellent example of what will happen if you over-regulate a popular product with a large user base, that is also believed to be life saving by the majority of the public: You will end up with a totally unregulated black market and possibly dangerous products, more popularity among teens and even children and essentially no control of the situation. Can the EU Parliament learn from Finland's mistake?