Australia Says It Has Right To Restrict Tobacco Packaging
Published February 08, 2012
Dow Jones Newswires
SYDNEY – Australia's government claims in court filings that it has the legal right to enforce plain packaging on the tobacco industry, setting up what's likely to be prolonged legal battle with the world's largest cigarette makers.
In a defense filing Tuesday with the High Court of Australia, the government argues it has the power to regulate the marketing and packaging of tobacco and also claims tobacco products are harmful to public health.
"The Commonwealth will vigorously defend the validity of the plain packaging laws and does not accept there is any basis for big tobacco's claims that the measures are unconstitutional," said Attorney General Nicola Roxon in a release.
Tobacco companies, including Philip Morris International Inc., the world's second-largest cigarette maker and seller of U.S. brands including Marlboro argue that Australia's ban on package advertizing is an infringement of their intellectual property and have lodged a suit to overturn the legislation.
"We have received a copy of the government's defence. We are currently reviewing it and are therefore not in a position to comment further at this stage," said Chris Argent, spokesperson for Philip Morris.
Philip Morris is also seeking arbitration from a United Nations tribunal to challenge the Australian government's plan. The company claims that the plain packaging laws breach a trade agreement struck in 1993 between Australia and Hong Kong to protect their respective offshore investments.
Rivals Imperial Tobacco Group PLC (IMT.LN), British American Tobacco PLC (BATS.LN) and Japan Tobacco Inc. (2914.TO) have also filed cases against the Australian government, claiming the laws are unconstitutional. The hearings will run concurrently and hearings are likely to begin in April.
A spokesperson for Imperial Tobacco in a statement to Dow Jones Newswires said the company "believes the Australian Government's actions are unconstitutional."
Laws passed in Australia's parliament will make the country the first to restrict logos, branding, colors and promotional text on tobacco packets. Product names will appear in standard colors and positioned in a regular font and size on packets colored a dark olive-brown, which government research has found holds the lowest appeal to smokers.
Health warnings with graphic images of the harmful effects of smoking will have to make up 75% of the front of the packaging and 90% of the back. The new packets are to be introduced on a staggered basis through 2012.
"As the matter is before the High Court it is not appropriate to make comment. British American Tobacco is looking forward to having this matter determined by the High Court as soon as possible," said a spokesman for British American Tobacco.
Copyright © 2012 Dow Jones Newswires
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