Big Tobacco to Launch Legal Suit over Plain Packaging Law
Published on July 14th, 2011 06:42
World tobacco leader Philip Morris will start legal suit over Australia's plan to implement plain cigarettes packaging, it declared several days ago, warning the damages bill could constitute billions of dollars.
In conformity with the advised government legislation designed at decreasing smoking rates, which should take effect in the future year, all logos would be removed from cigarette packaging in Australia, and company brand name printed in a particular font.
Also all packages will have an olive-green color and contain graphic health warnings as for instance: diseased gums, children in hospital and blinded eyes.
The given proposal has infuriated the tobacco leaders, who declare it would decrease their returns and make illicit products flood the market because plain packaging is very easy to reproduce.
Hong Kong-based Philip Morris, which distributes such brands as Marlboro, will debate that Canberra is infringing a bilateral investment treaty between the two countries.
“The compulsory removal of trade marks is an evident breach of the terms of the bilateral investment treaty between Australia and Hong Kong,” PM representative Anne Edwards declared in an interview.
“We think that we have a forcible legal case and will be looking for essential financial compensation for the harm to our business.”
The notification of claim, which was to be served on Monday, will begin a three-month negotiation period and if no decision is reached the case will be transmitted to arbitration.
“Legal suit is not a rashly action, as the government has left us without any option,” said Edwards.
According to Don Wallace Jr., chairman of the International Law Institute the compensation to tobacco giants could be significant.
“The legislation on plain packaging would subject Australia to persuasive claims under the treaty, apparently costing the Australian government a loss of billions of dollars,” stated Wallace.
It was estimated that 15,000 Australians die from smoking-related illnesses annually, and that tobacco use costs the country $33 billion per year in healthcare and lost productivity.
Though Australia would be the first country in the world to introduce a plain packaging, Britain, Canada and New Zealand have decided to adopt similar policies, and Prime Minister Julia Gillard stated that the government would not be swayed.
“We won’t tolerate to be intimidated by tobacco company’s tactics, whether they are political actions, whether they are some affairs of public kind or whether they are legal actions,” she stated.
“We are not going to make a step backwards. We have made the right decision and we will see it working.”
“Tobacco is unlike any other legal product. Everyone knows so much about the dangers it causes. So, the government was sure it was undertaking strong and effective steps,” Health Minister Nicola Roxon told in an interview.
