Australia: high court strikes down tobacco challenge

Aug 16, 2012

One of the world’s toughest cigarette labeling laws is set to take effect in Australia in December, after the country’s highest court ruled Wednesday against multinational tobacco companies that had sought to block the legislation.

Graphic images of mouth ulcers, cancerous lungs and gangrenous limbs will dominate the front of all cigarette packages sold in the country, and brand logos will be banned, after a landmark ruling by the High Court of Australia determined that the new laws were consistent with the Constitution and did not violate the rights of Big Tobacco.

In a suit with potential global ramifications that was closely watched by industry lobbyists and health advocates in Australia and abroad, British American Tobacco, Imperial Tobacco, Japan Tobacco and Philip Morris Australia had argued that the new ban on brand logos would infringe on their intellectual property rights, an argument that was rejected by the court.

Legal experts said the decision Wednesday could set a precedent for other countries seeking to introduce harsher labeling requirements for tobacco products as a means to curtail smoking and its related health problems among their populations.

Benn D. McGrady, an adjunct professor at the O’Neill Institute for National and Global Health Law at Georgetown University in Washington, said the specific implications of the decision would depend to a great extent on the detailed reasons for the decision, which the court has yet to issue.

Australian officials welcomed the ruling, which they hope will combine with some of the highest taxes in the world on tobacco to further drive down smoking rates.

“This is a victory for all those families who have lost someone to a tobacco-related illness,” Nicola Roxon, the attorney general, and Tanya Plibersek, the health minister, said in a joint statement. “No longer when a smoker pulls out a packet of cigarettes will that packet be a mobile billboard.”

The European Union already bans cigarette advertising on billboards, television, radio, print media and the Web. The Union also prohibits tobacco companies from sponsoring cross-border events. National governments can go further, and some member states have banned tobacco companies from distributing promotional merchandise like ashtrays and umbrellas.

The European Commission, the executive arm of the Union, plans to review its regulations on tobacco in the autumn. One option for the regulation would be to require plain packaging for cigarettes. John Dalli, the European commissioner for health and consumer policy, has said the final draft of the proposal would not go as far as Australia’s law. The commission said Wednesday it had no comment on the Australian ruling.

The Australian decision on the suit filed by the multinational tobacco companies was the last major legal hurdle to implementing the new rules, which require health warnings to cover 75 percent of the front of cigarette packages and 90 percent of the back starting Dec. 1.

Brand logos and colorful designs will be banned, with only a small space remaining where the brand name and variant of the cigarette can be printed. Packages will be required to be a uniform shade of olive green.

Tobacco companies criticized the ruling, which they said would do little to curb smoking and would instead provide a financial boon to organized crime groups that deal in smuggled tobacco products.

“We’ve always said the government had forced us down the legal path as we really didn’t want to take action,” said Scott McIntyre, a spokesman for British American Tobacco Australia, the local market leader and one of the largest tobacco groups by revenue in the world, with brands including Lucky Strike. “At the end of the day, no one wins from plain packaging except the criminals who sell illegal cigarettes around Australia.”

Tobacco is severely taxed in Australia, where smokers spend about 16 Australian dollars, or $16.80, for a single pack of cigarettes. Those packages already come with graphic depictions of the effects of smoking-related diseases, but the new rules go one step further by shrinking the brand labeling down to a point at which it becomes difficult to distinguish one company’s cigarettes from another’s.

Partly as a result, smoking rates in Australia have declined in recent years and stood at 16.4 percent among adult men and 13.9 percent among adult women as of 2010, according to figures from the Australian Cancer Council. In the United States, by comparison, most recent data from the Centers for Disease Control show the smoking rate is 21.5 percent among adult men and 17.3 percent for adult women.

Experts say the court decision effectively ends the tobacco industry’s legal battle against plain packaging in Australia.

But such labeling restrictions remain the subject of continuing consultations in the World Trade Organization, as well as the target of a challenge brought by Philip Morris Asia under an investment agreement between Australia and Hong Kong.

“Because the reasons for the High Court’s decision have not yet been released it remains to be seen how the case will affect challenges under international law, such as those brought at the W.T.O. and under investment treaties,” said Mr. McGrady of Georgetown University.

Still, opponents of the tobacco industry were hopeful that the court’s decision would prove to be a watershed moment in the global push for tougher labeling laws, causing similar action in countries around the world.

“The clear message from today’s ruling is that the tobacco industry can be beaten,” said Jonathan Liberman, a legal expert and director of the McCabe Center for Law and Cancer in Melbourne.

“When other countries are confronted with the tobacco industry’s legal threats, they will remember how empty those threats proved to be in Australia,” he said.

Source: The New York Times (August 16, 2012)