Tobacco industry fears plain-pack ‘domino effect’

In a move seen by tobacco companies as state appropriation of their brands and intellectual property, all cigarettes sold in Australia from 1 December must conform to strict ‘no trademarks’ legislation, in drab olive-coloured packaging displaying graphic health warnings.

 

Australia’s high court dismissed a challenge by Japan Tobacco, British American Tobacco, Philip Morris International and Imperial Tobacco Group against the legislation, which were claiming their intellectual property was being seized illegally.

 

Other countries are monitoring the Australian government’s actions, with Britain, Canada, New Zealand, China, France, India, South Africa and Uruguay considering similar measures.

 

Smoking has killed an estimated 900,000 Australians over 60 years, and the ruling is a victory for the Gillard government, which foots the A$31.5bn ($33.0bn, £20.8bn, €26.2bn) in annual smoking-related health costs. Health minister Tanya Plibersek said: “For anyone who has lost someone to smoking, this one is for you.”

 

Tobacco products kill almost six million people globally each year, a figure that may reach more than eight million by 2030 unless governments take action to limit tobacco exposure, according to the World Health Organisation (Who).

 

Who director general Margaret Chan said: “With so many countries lined up to ride on Australia’s coattails, what we hope to see is a domino effect for the good of public health.”

 

Philip Morris plans to pursue claims against the Australian government for the loss of its ability to use trademarks, said Chris Argent, a spokesman for the Marlboro cigarettes maker.

 

“The legality of plain packaging, including whether Australia will have to pay substantial compensation to Philip Morris Asia, remains at issue and will be considered in other ongoing legal challenges,” Argent said.

 

The value of shares in Japan Tobacco fell 4.8% to 2,439 yen at the close of trading in Tokyo, the biggest decline since early 2011. BAT shares fell 0.5% in London while Imperial slipped 1.7%.

 

Consultations on a UK government plan to enforce standardised packaging for tobacco products ended in August, with the International Chamber of Commerce among the bodies raising concerns. 

 

The plain-pack requirements would probably breach a number of the UK’s international obligations, including World Trade Organisation intellectual property pacts, Andrew Wilson, the ICC’s director of policy, said after the hearings.

 

In the US, cigarette makers have relied on the first amendment of the Constitution, which protects the right to freedom of expression from government interference.

 

“There is First Amendment protection, but it’s not absolute,” Matthew Myers, president of Campaign for Tobacco-Free Kids in Washington, said. With enough evidence to show curbs are needed to protect public health, the First Amendment hurdle can be overcome, Myers said.