Asia-Pacific

Philip Morris threatens to sue Australia

(Agencies)
Updated: 2011-06-27 16:05

A combination photo shows illustrations obtained by Reuters of some of the proposed models of cigarettes packs April 7, 2011. [Photo/Agencies]

"Nanny state"

The tobacco industry has been running TV advertisements against the plain packaging laws, asking Australians do they want to live in a "nanny state."

British American Tobacco , whose brands include Winfield, Dunhill and Benson & Hedges, has said the government's plans would infringe upon international trademark and intellectual property laws and has also raised the possibility of pursuing legal action.

"The tobacco industry is watching this with obvious interest and it's aiming to put as much pressure on as many states as possible who are thinking of pursuing this type of action," said Jurgen Kurtz, director of international investment law at the University of Melbourne.

The new laws would restrict tobacco industry logos, brand imagery, colours and promotional text appearing on packs, with the only distinguishing marks being the brand and product name in a standard text and colour.

Olive green packaging had been decided upon because research showed smokers found it the least attractive colour.

Philip Morris said it had manufactured and sold cigarettes in Australia since 1954 and built up well-known brands such as Marlboro, Alpine and Longbeach.

It said plain packaging would "rob" Philip Morris of its ability to use these brands to differentiate its brands from those of its competitors, effectively turning tobacco products into a commodity.

Analysts say that if plain packaging succeeds in commoditising the tobacco industry, it could raise pressure for takeovers to cut costs.

Smoking-related illnesses kill more than 15,000 Australians each year and cost the economy A$31.5 billion in health costs, according to Australian government health authorities. Smoking is the largest preventable cause of disease and death.

Australia already bans all outdoor and media advertising of cigarettes and cigarette packets are covered with graphic photographs of the affects of cancer.

Australia's tobacco market generated total revenues of A$9.98 billion ($10.4 billion) in 2009, up from A$8.3 billion in 2008, although smoking generally has been in decline.

($1 = 0.953 Australian dollars)