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Rush to Plain Packs

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Rush to Plain Packs special Variety in cigarette packaging is under attack. A relative period of quiet in the years since Australia passed the world's first plain-pack law ended this year when EU countries began passing laws of their own. Photo: The Virtual Tobacconist (CC BY-SA 2.0) creativecommons.org The statement said plain packaging had Rush to plain packs been shown to “reduce the attractive- ness of the product for consumers, es- pecially amongst women and young people” as well as increasing, “the effec- tiveness of health warnings on packets Two European countries have joined Australia with laws mandat- and reducing the ability of tobacco ing uniform branding on packaging for cigarettes and hand- packaging to mislead consumers about the harmful effects of smoking”. rolled tobaccos. More are waiting in the wings. All countries sending representatives to the meeting have either passed a plain packs law or are discussing the issue. n March 2015 the UK and Ireland This sets the stage for a major legal con- passed plain pack laws. Final appro- frontation between governments and Legal challenges I val in France is expected this au- tobacco manufacturers. tumn. It is highly likely that they will be joined by other European countries in- Currently, the UK government is facing Ministerial meeting cluding Norway, Sweden and Turkey, four lawsuits from the major tobacco which are in the midst of consultations companies Philip Morris International over this issue. Ministers from around the world met to (PMI), British American Tobacco (BAT), Across Europe to Asia Minor, more discuss plain packaging in Paris on 20 Japan Tobacco International (JTI) and countries are working to adopt neutral July, 2015, at the invitation of French Imperial Tobacco (all filed at the High packaging legislation – something that Health Minister, Marisol Touraine. Court during May 2015). will be supported when the EU Tobacco Attended by health ministers from 10 If the courts find in favour of tobacco Products Directive (TPD) comes into ef- countries (Australia, France, Hungary, companies, this could cost the UK and fect in May 2016. The revised TPD sets Ireland, New Zealand, Norway, South its taxpayers some GBP 11 billion (EUR minimums for pictorial health warnings Africa, Sweden, United Kingdom, and 15.4 billion) in compensation. to cover 65 per cent of the front and Uruguay), as well as the head of the Daniel Torras, managing director at JTI back and 50 per cent of the sides of ciga- WHO Framework Convention on To- UK said, “we have clearly and re- rette and RYO packaging. bacco Control Secretariat, the confer- peatedly made clear to the UK Govern- Branding is allowed in the remaining ence launched “a common drive to in- ment that plain packaging will infringe space, but TPD permits introduction of troduce plain cigarette packaging with our fundamental legal rights without re- standardised or neutral packaging on the aim of stubbing out high smoking ducing smoking. Despite the lack of evi- the grounds of public health, providing rates among young people”. dence that plain packaging works, the it is proportionate and does not deliver In a joint statement, the attendees said, government has decided to proceed hidden barriers to trade in the European “significant scientific proof justified [...] and JTI must now protect its rights in Union (EU). plain cigarette packaging”. the courts.” ̈ 68 TOBACCO JOURNAL INTERNATIONAL Ȋ 4/2015 special In a similar vein, Melvin Ruigrok, Imperial Tobacco’s general ard) Hoffman, who said banning the use of branding on ciga- manager in the UK and Ireland, had this to say: “We have a rette packaging altogether could be a breach of trademark legal right to differentiate our brands from those of our com- law, and that rejecting a company’s right to use an internation- petitors. Our preference is always for constructive dialogue. ally recognised trademark in the UK could be in breach of the Regrettably, however, we've been left with no choice than to principle of free movement of goods within the EU. seek to defend our rights by issuing a legal challenge.” On 2 May 2015, the International Trademark Organisation The legal battle over plain packaging has begun. In March, (INTA) said plain and highly standardised packaging restric- 2015, the anti-smoking charity Action on Smoking and Health tions should be rejected or repealed. INTA recommended (ASH) backed the government by commissioning a legal governments, “seek less drastic measures that do not violate opinion that supported the right of the UK government to in- international and national law.” troduce plain packaging under EU law relating to trademarks The World Trade Organisation (WTO) is expected to rule on and fundamental rights. plain packaging due in 2016. According to INTA, countries “The tobacco industry knows it has little or no chance of win- should await the trade body decision before proceeding. INTA ning but by threatening legal action it is trying to stop the in- said it was concerned about, “violations of international fection spreading to other countries. Standardised plain pack- treaties and domestic laws,” as well as, “the practical impli- aging threatens the profitability of the industry and they are cations of plain and highly standardised packaging impinging desperate to prevent other countries from following the ex- upon consumer choice, limiting competition and paving the ample set by Australia, the UK and Ireland,” said Deborah Ar- way for increased counterfeiting and trade in diverted goods”. nott, chief executive of ASH. Tobacco manufacturers say they believe plain packaging legis- Feel good politics lation erodes their right to brand identity and will reduce mar- keting options to differentiation over price, with subsequent loss of revenue. Tobacco company lawyers have drawn on a Nick de Bois, a former MP for Enfield North, is against smok- legal opinion by former senior Appeal Court judge Lord (Leon- ing, but also opposed plain packaging in the House of Com- mons debate. He outlined his reservations about plain packag- ing to TJI. “This is bad legislation and the result of ‘feel good’ politics rather than rational policy based upon firm evi- dence.” The reasons for his objection are threefold. Firstly, there will be no brand differentiation and this will lead to price being the only disparity. Prices of tobacco can be expected to fall, there will be fewer brands and consumers will base their pur- chasing decisions solely on price. Secondly, there has been no proper assessment of the effect of plain packaging on the growth in the counterfeit and illicit cigarette market where a lack of brand differentiation could actually be an advantage to counterfeit cigarette producers and the consequent sales of unregulated and dangerous tobacco products. Thirdly, there is the threat to the public purse from multiple-litigation brought by tobacco companies seeking compensation for their loss of brand identity, intellectual property and the abil- ity to sell products in a free market. “It might have been better to await the outcome of litigation from tobacco companies around the world before using UK tax payer’s money to fight the cause of plain packaging,” de Bois said. There would have been plenty of time to introduce plain packaging once the legal challenges had been adjudi- cated, he said. “During the woefully inadequate 90-minute de- bate and subsequent vote, Health Minister Jane Ellison gave no answer to the question about the threat to the public purse.” Legal experts speak Opinion on the effectiveness and legality of plain packaging in the UK is divided. TJI sought opinions from two legal ex- perts on whether existing law supports the placing of plain packaging restrictions on manufacturers. 70 TOBACCO JOURNAL INTERNATIONAL Ȋ 4/2015 special Michael Conway is an attorney at Volume 24, Suppl 2). These studies provided peer reviewed Haseltine Lake – a major European statistically significant evidence of a reduction in the perceiv- patent and trade mark firm. ed appeal of cigarette packs to young adults, an increase in “Once plain packaging is intro- smokers thinking of quitting from 20 per cent to 27 per cent duced, it is clear that the ability of and little evidence of an increase in the use of cheaper and il- tobacco manufacturers to use licit tobacco products. According to Cancer Council Victoria, trademarks and pack design to dis- these results demonstrate that plain packaging in Australia is tinguish their products from those working. of other companies will be se- verely diminished,” he said. “But Losing the last link from a trade mark registration per- spective although the new plain Photo:courtesy of Coffin Mew pack regulations establish a ‘prop- Mark O’Halloran It is clear that the plain packaging ‘roller coaster’ is on the er reason for non-use’ of any regis- move in Europe. It is too early to say whether EU courts or the tered trademarks it will not be possible to cancel these trade- WTO will apply the brake. Tobacco companies in the UK, marks due to non-use, so tobacco companies will be able to France and Ireland stand to lose a powerful marketing tool, retain and enforce any trademark registrations they are un- and the last link between brand perception and the customer. able to use,” Conway said. Dr Alan Stanton of Royal College of Paediatrics and Child Mark O’Halloran, a partner in the commercial team at Coffin Health was asked by TJI if he thought having cigarettes and to- Mew, said, “the general position is that there is insufficient bacco products in plain packs would stop children and young evidence to support the move, not least as even the UK Gov- people from taking up the habit. “Yes,” he answered. “Whilst ernment conceded in its impact assessment that it was too we could not claim to have watertight scientific evidence, it early to draw conclusions from Australia's experience as the would seem to be very likely that this will be effective, as part first country to mandate plain packaging.
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