Tag: Plain Packaging

  • Cuba joins fight over Aussie plain packaging rules

    Cuba has become the latest country to launch a legal attack on Australia’s landmark plain packaging rules for tobacco at the World Trade Organization (WTO).

    The laws came into effect last December and mean cigarettes can only be sold in brown packages with graphic health warnings. The WTO says Cuba has requested consultations with Australia on the legislation, which covers all tobacco products, not just cigarettes. Under the 159-nation WTO’s rules, requesting consultations is the first step in an often complex trade dispute settlement process which can last for several years.

    The laws have already been challenged at the WTO by Cuba’s fellow cigar-producing nations Honduras and the Dominican Republic. In addition, the Ukraine has filed a suit at the Geneva-based body, which oversees its member nations’ respect for the rules of global commerce, according to the Australian news company ABC.

    All the plaintiff countries maintain that Australia’s packaging law breaches international trade rules and intellectual property rights.

    In the event that the WTO’s disputes settlement body finds in their favor, it would have the power to authorize retaliatory trade measures against Australia if the country failed to fall into line. The dispute with Australia marks the first-ever challenge by Cuba against a fellow member since it joined the global body in April 1995, four months after the WTO was founded in its current form.

    The plain packaging laws have won wide praise from health organizations which are trying to curb smoking. But the government has faced a string of court challenges from tobacco firms.

    Besides trade and intellectual property concerns, tobacco companies say there is no proof that plain packaging reduces smoking and have warned that the law sets a precedent that could spread to products such as alcohol.

  • Plain packaging a £5 billion gorilla for UK taxpayer?

    U.K. taxpayers could face a £5 billion ($7.67 billion) bill if ministers insist cigarettes are sold in plain packages.

    The money would be awarded by courts to tobacco companies in recognition of the fact that the government had destroyed their brand equity, according to the Centre for Economics and Business Research, as reported on the This is Money website.

    Legal challenges under the Human Rights Act or EU law could claim that requiring plain packages meant the industry had been unfairly deprived of its trademark rights, says a report by the think-tank.

    The Australian government, which has introduced plain packaging, is being sued by companies for the loss of their brands.

    The think-tank’s chief executive, Douglas McWilliams, said the use of plain packaging would lead to cheaper cigarettes as smokers became less aware of costlier brands and new entrants were spared the expense of marketing.

    This would mean less money for the treasury with “a reduction in tobacco’s aggregate annual contribution to the Exchequer of between £219 million and £348 million.”

  • Inconvenience: Philip Morris report says plain packaging could cost 30,000 jobs

    Thousands of jobs could be lost if plain packaging for cigarettes and tobacco products is introduced, according to a story in the South Wales Evening Post, citing a report released and commissioned by Philip Morris Ltd.

    The report suggests up to 30,000 of the 182,300 jobs in Britain’s small, independent retailers are at risk and concludes tobacco purchases will migrate to illegal street vendors, larger stores and purchases from abroad.

    Douglas McWilliams, co-author of the report, said, “Convenience stores depend  heavily on tobacco sales and the associated spending by those who drop in to buy cigarettes.

    “All the survey evidence and simulation exercises available suggest that plain packaging would cause spending to move to illegal street vendors, larger stores and purchases from abroad. If this is replicated in real life, high streets up and down the country would be dealt a body blow.”

  • Report dismisses industry claims about plain packaging

    A report commissioned by Cancer Research UK dismisses the tobacco industry’s claims that the U.K. government’s plans to introduce plain packaging for cigarettes will boost the trade in illegal cigarettes, reports HealthCanal.

    According to the report, which was prepared by Luk Joossens, advisor to the World Bank, the European Commission and World Health Organization on illicit tobacco trade, producers of counterfeit cigarettes find all existing cigarette packaging easy to forge, and that introduction of plain packaging is unlikely to cause more counterfeiters to make more fake packs.

    Noting that producers of counterfeit cigarettes are able to provide “top quality packaging at low prices in a short time,” Joossens said “plain packaging will not make any difference to the counterfeit business.”

    Cancer Research UK’s director of tobacco control Jean King said the tobacco industry “has a track record of facilitating smuggling and often says policies that cut smoking will increase smuggling, even though smuggling has been falling for a decade.”

  • Australia’s plain packaging an “anomaly”

    Morgan Stanley analysts believe the spread of plain packaging beyond Australia may be “very slow.”

    Capital markets have been concerned that Australia’s plain tobacco packaging law–the world’s first–could spread to other nations, ultimately commoditizing the tobacco category by hurting brand equity and reducing manufacturers’ pricing power.

    The analysts base their optimism on the facts that there is no evidence that the measure will reduce tobacco use or youth initiation and that such legislation appears both “extreme and disproportionate.”

    They also point out that plain packaging will “almost certainly” fuel the black market, thus reducing tax revenues, and that the legislation arguably violates various international trade rules.

    The analysts suggested that the nation’s geographic positioning may have led policy makers to believe that the country would be largely immune to contraband.

    Although the Commonwealth still faces strong legal challenges under a Bilateral Investment Treaty with Hong Kong and the World Trade Organization, the failure of the industry’s constitutional challenge in the country’s High Court “reflects the unique nature of Australia’s ‘protection’ of trademarks and intellectual property,” the analysts said.

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