Monthly Archives: November 2011

Philip Morris sues Australia over plain packaging

Nov 24, 2011

Tobacco giant Philip Morris today launched legal action against Australian laws forcing tobacco products to be sold in drab, plain packaging from late next year.

Australia’s parliament has passed laws compelling cigarettes, pipe tobacco and cigars to be sold in plain olive packs from December 2012.

Tobacco export countries including Nicaragua, Dominican Republic and Ukraine have warned they may challenge under world trade rules, while tobacco companies including British American Tobacco and Imperial Tobacco, have said they may challenge the law in Australia’s High Court.

Philip Morris said it had launched legal action that could trigger compensation claims worth billions of dollars.

“The Government has passed this legislation despite being unable to demonstrate that it will be effective at reducing smoking and has ignored the widespread concerns raised in Australia and internationally regarding the serious legal issues associated with plain packaging,” Philip Morris spokeswoman Anne Edwards said in a statement.

The action is being brought by Philip Morris Asia Ltd, Hong Kong, the owner of the Australian affiliate, through a notice of arbitration under Australia’s Bilateral Investment Treaty with Hong Kong.

The laws are being closely watched by governments considering similar moves in Europe, Canada and New Zealand, angering tobacco companies worried that they may set a global precedent and infringe on trademark rights.

The Himalayan nation of Bhutan banned the sale of tobacco outright earlier this year.

Australia’s Health Minister Nicola Roxon, speaking after parliament’s lower house approved laws already passed by the upper house Senate last week, demanded tobacco companies respect the will of the parliament.

“Plain packaging means that the glamour is gone from smoking and cigarettes are now exposed for what they are: killer products that destroy thousands of Australian families,” Roxon told reporters.

Roxon said while the tobacco industry was fighting to protect its profits, the government was “fighting to protect lives”.

The World Health Organisation in 2005 urged countries to consider plain packaging, and estimated more than 1 billion are regular smokers, 80 percent of them in poor countries.

Industry analysts say tobacco companies are worried that plain packaging could spread to important emerging markets like Brazil, Russia and Indonesia, and threaten growth there.

Legal experts have predicted both legal and WTO challenges to fail, as intellectual property rights agreements give governments the right to pass laws to protect public health.

Conservative opposition MPs, while backing the laws, urged Roxon to accept a three month moratorium on prosecutions and the enforcement of heavy fines for small tobacco sellers to give them time to adjust to the possible impact on sales.

Australia already bans tobacco advertising, smoking in public buildings and the public display of cigarettes in shops. In some states, it is illegal to smoke in a car if a child is a passenger.

Australia wants to cut the number of people who smoke from around 15 percent of the population to 10 percent by 2018. Health authorities say smoking kills 15,000 Australians each year with social and health costs of around $32 billion.

Australia’s tobacco market generated total revenues of around $10 billion in 2009, up from $8.3 billion in 2008, although smoking generally has been in decline. Around 22 billion cigarettes are sold in the country each year.

Source: The Age (November 21, 2011)


Australia: New picture warnings

Nov 21, 2011

Australia has released draft regulations for new pictorial health warnings to be implemented in 2012. The draft regulations proposed two sets of seven health warnings for cigarette packages and five health warnings for cigar packages. The warnings would be required to cover 75% of the front and 90% of the back of cigarette packages. The proposal features warnings for blindness, death, lung cancer, mouth cancer, throat cancer, kidney and bladder cancer, gangrene, emphysema, gum and tooth damage, heart disease, stroke, harm to unborn babies, and harm to children from second hand smoke, as well as the benefits of quitting, and the “quitline” number on all packs. Images for the proposed warnings can be viewed here, while the complete Draft Regulations are available here.

Source: Product Safety Australia (November 14, 2011)

USA: Court Blocks Pictorial Warnings

Nov 9, 2011

A federal judge on Monday blocked a Food and Drug Administration requirement that tobacco companies put big new graphic warning labels on cigarette packages by next September.

In a preliminary injunction, Judge Richard J. Leon of United States District Court in Washington ruled that cigarette makers were likely to win a free speech challenge against the proposed labels, which include staged photos of a corpse and of a man breathing smoke out of a tracheotomy hole in his neck.

The judge ruled that the labels were not factual and required the companies to use cigarette packages as billboards for what he described as the government’s “obvious anti-smoking agenda!”

The 29-page ruling was a setback for Congressional and F.D.A. efforts to bolster the warnings on tobacco packages. The agency has said they are the most significant change to health warnings in 25 years.

The Justice Department is reviewing the ruling, a spokesman, Charles S. Miller, said. The F.D.A. declined to comment, a spokeswoman said.

If the ruling is appealed – as both sides expect – it would join a different federal judge’s ruling on similar issues on appeal and raise the possibility that the issue will be decided by the United States Supreme Court.

Floyd Abrams, a New York lawyer and First Amendment specialist who argued the case for Lorillard Tobacco of Greensboro, N.C., praised the ruling. He said the companies had just objected to “grotesque” images, but not to new words of warning.

“It’s basically rooted in the notion that compelled speech by the government is presumptively unconstitutional,” Mr. Abrams said. “The only exception that could fit here is the one which says that the government can require warnings to be placed on products including tobacco products, but that the warnings must be factual and uncontroversial in nature.”

Five tobacco companies had challenged the selection of nine specific graphic warnings as an unconstitutional intrusion on commercial free speech. The judge agreed with them on almost every point, saying the companies would suffer irreparable harm if the provision were enforced before it was fully decided in courts, a process that is likely to take years.

“It is abundantly clear from viewing these images that the emotional response they were crafted to induce is calculated to provoke the viewer to quit, or never to start, smoking: an objective wholly apart from disseminating purely factual and uncontroversial information,” Judge Leon wrote.

“At first blush, they appear to be more about shocking and repelling than warning,” Judge Leon added in a footnote.

Antismoking activists called on the Justice Department to appeal immediately.

“This ruling presents a direct and immediate threat to public health,” Charles D. Connor, president and chief executive of the American Lung Association, said in a statement. “The tobacco industry’s efforts to halt the replacement of cigarette warning labels that are 25 years old, ineffective and hidden on the side of packages, will result in more lives lost to tobacco.”

Matthew L. Myers, a lawyer and president of the Campaign for Tobacco-Free Kids, a Washington advocacy group, said Judge Leon had sympathized with tobacco companies during oral arguments.

“The government has been expecting this decision and will appeal,” Mr. Myers said. “In addition, many of the same issues are now pending before a panel of the United States Court of Appeals for the Sixth Circuit because a federal judge in Kentucky reached a decision different than Judge Leon’s decision today.”

In that case, Judge Joseph H. McKinley Jr. ruled the cigarette makers could be forced to put graphic images and warnings on the top half of their packages, as Congress required. But Judge Leon noted that Judge McKinley had not seen the actual proposed images.

Judge Leon was appointed to the bench in 2002 by President George W. Bush. Last year, Judge Leon also ruled against the F.D.A. over e-cigarettes, an electronic device that looks like a cigarette and delivers nicotine, saying they should be regulated as tobacco products rather than under the stricter regimen as drug delivery devices. The government has not appealed that case.

The Family Smoking Prevention and Tobacco Control Act of 2009 gave the F.D.A. authority for the first time to regulate tobacco products. It included a provision directing the F.D.A. to require larger, graphic warning labels covering the top half of the front and back of cigarette packs by Sept. 22, 2012, as well as 20 percent of print advertising.

The F.D.A. had studied 36 images and narrowed them down to nine after surveys of effectiveness. The photos are similar to some included with cigarettes in Canada. But the tobacco companies argued, and the judge agreed, that the F.D.A. could not prove the images would make a statistically significant difference in smoking rates in the United States.

“We are pleased with the judge’s ruling and look forward to the court’s final resolution of this case,” Bryan D. Hatchell, a spokesman for R.J. Reynolds Tobacco of Winston-Salem, N.C., makers of Camel cigarettes, said after the ruling.

Other plaintiffs in the suit are Commonwealth Brands, the Liggett Group, and Santa Fe Natural Tobacco. The Altria Group, parent company of Philip Morris, makers of the dominant brand of Marlboro cigarettes, did not join the lawsuit. Altria was also the only major cigarette maker to support the new legislation.

Source: New York Times (November 7, 2011)


Australia: Plain packs by December 2012

November 7, 2011

Labor’s legislation on plain packaging of cigarettes is set to pass parliament next week, but tobacco products won’t be sold in olive-brown packages until the end of 2012 – five months later than originally planned.

The federal government says it will ram the draft laws through the Senate next Thursday with a “limited” debate followed by a vote.

The coalition supports the main plain packaging legislation but not an associated trademarks bill.

However, both will pass the Senate with the support of the Greens.

Cigarettes were to be sold in plain packs from July 1 next year but Health Minister Nicola Roxon announced on Wednesday that implementation would be pushed back until December 1.

Ms Roxon said the delay was necessary because it had taken longer than expected for the upper house to pass the legislation after it sailed through the House of Representatives in August.

“(But) that’s a small setback,” she told reporters in Canberra.

“Having a few last gasps for the tobacco companies doesn’t stop the fact we are going to put an end to marketing of tobacco products in Australia.”

Ms Roxon said there had been a lot of shenanigans in the Senate “and a lack of enthusiasm on the part of the Liberal Party” to pass the bills.

But opposition health spokesman Peter Dutton rubbished that claim.

Mr Dutton said Labor had delayed its own bill because it had other priorities – namely passing the controversial carbon tax legislation which has dominated debate in the upper house this week.

“The government runs the agenda in the Senate,” Mr Dutton told reporters.

“We want to see a reduction of smoking rates in our country.”

Under Labor’s revised timeline, the preliminary provisions of the plain packaging legislation will now come into effect when they receive royal assent – rather than on January 1.

Manufacturers will have to produce plain packets from October 1 next year instead of May 20, while retailers will be banned from selling any branded stock from December 1 instead of July 1.

Big tobacco has welcomed the delay but says cigarette makers need more time still to prepare.

Imperial Tobacco insists it needs up to 17 months from when the legislation is finalised.

“December 1, 2012, remains an impossible deadline,” Imperial spokeswoman Sonia Stewart said in a statement.

British American Tobacco Australia (BATA) told a parliamentary inquiry in August that manufacturers and retailers should be given until 2014 to make the change to plain packs.

The company has also vowed to challenge the world-first legislation in court once it passes parliament.

BATA argues that the commonwealth is planning to unlawfully acquire its intellectual property rights.

Source: The Sydney Morning Herald (November 2, 2011)

UAE: Pictorial Warnings

Nov 4, 2011

The UAE Cabinet yesterday approved warnings on cigarette packets with a graphic picture covering about half of the packet.

It also bans tobacco companies from using “smooth, “silky”, “light” or similar words to describe the product.

Abdul Rahman Al Owais, Acting Minister of Health, said the regulation will be enforced once approved at the Gulf Cooperation Council (GCC) level. It is part of the UAE anti-tobacco executive bylaw, he said. He did not give a deadline when this will be enforced.

Dr Wedad Al Maidour, head of the tobacco control committee, welcomed the move, saying that graphic images send a strong message to smokers. She called it a “great achievement”. The next step is to have plain, white packs without any labelling as in Australia and the UK, she said.

Dr Sreekumar Sreedharan, a specialist physician, said studies show that such graphics make people aware of the dangers of smoking. He said raising the cost of cigarettes does not work. The news comes as Gulf News initiated a campaign with a medical group to help readers quit this deadly habit.

Source: Gulf News (November 1, 2011)