Australia - tobacco tax increase now in force, next comes plain tobacco packaging..

Takes lead in

April 29, 2010 - Outraged tobacco companies have blasted Kevin Rudd's (Prime Minister of Australia and federal leader of the centre-left Australian Labor Party) new cigarette packaging plans, threatening to challenge them in court and seek compensation.


Earlier today the Prime Minister announced the tax on cigarettes would increase by 25 percent from midnight tonight (adding about $2.16 to a pack of 30 cigarettes) and that tobacco companies would be required to use plain packaging from July 1, 2012.

Just think - The Marlboro man could soon be banned from the Outback. Australia could become the first nation to ban brand images and colors on cigarette packages under a wide-ranging set of anti-smoking measures the government announced Thursday, April 29th.

Starting July 1, 2012, tobacco products would have to be sold in the plainest of packaging — with few or no logos, brand images or colors. Promotional text would be restricted to brand and product names in a standard color, position, type style and size.

The government said the moves would cut tobacco consumption and generate billions of dollars of revenue that would be plowed into the health system. The action won praise from the World Health Organization (WHO), which welcomed the measures as "a new gold standard for the regulation of tobacco products."

First it was New South Wales taking the lead in tobacco control in all of Australia. Now its the Australia becoming the world leader in tobacco control protecting the health of their citizens and their next generation - their children.

Mr. Rudd said he went public with the plan because of Australian Tax Office reports that revealed smokers, fearing a price rise, had begun stockpiling cigarettes.

Tobacco companies are arguing the new packaging plan will damage their brand name and some already have plans to take legal action. “Introducing plain packaging just takes away the ability of a consumer to identify our brand from another brand and that's of value to us,” Imperial Tobacco Australia spokeswoman Cathie Keogh told ABC Radio. She added the company was planning legal action.

British American Tobacco Australia (BATA) told The Australian Online: “We oppose plain packaging and we will defend the intellectual property which lies in that packaging. “If that requires us to take legal action, then we would do so. “We would look at various things, including intellectual property rights, trademark legislation and remedies under international treaties.” BATA would also consider pursuing compensation from the government for “acquisition of our property on unjust terms”.

Philip Morris International declined to say whether it would take legal action against the measure but argued that the imposition of plain packaging would represent "an unconstitutional expropriation of valuable intellectual property, violating a variety of Australia's international trade obligations."

Retailers have also said the tax hike would hurt their businesses and agreed with tobacco companies that plain packaging would bolster the cigarette black market. “It's a lazy policy response being pushed by some health advocates,” said Mick Daly, chairman of Australian supermarket chain IGA.

Chair of the National Preventative Health Task Force Rob Moodie said there would be one million fewer smokers by 2020 if measures such as plain cigarette packets were implemented. And Professor Rob Moodie said he did not believe tobacco companies would be entitled to compensation. “It's a solid case on constitutional and legal grounds,” he said, rejecting suggestions easy-to-copy plain packets would be a boon for dodgy cigarette counterfeiters.

Mr Rudd said that revenue from the hike in the tobacco excise would generate an extra $5 billion over four years and would be directly invested in hospitals. Announcing the rise himself in Sydney's Commonwealth Parliamentary Offices, the Prime Minister said it would not lift the government in the popularity stakes. “This is a tough decision for the government,” he said. “It won't win the government any popularity. The big tobacco companies will hate what we are doing. “It is the right decision.”

Prime Minister Kevin Rudd said, "We, the government, will not be intimidated by any big tobacco company." Cigarette boxes would continue to carry graphic health warnings, including photographs of the effects of smoking-related diseases.

The measures announced on Thursday. April 29th also include a 25 percent increase in the excise tax on tobacco products. That will increase the cost of a packet of 30 cigarettes by about 2.16 Australian dollars, to about 16.70 Australian dollars ($15.40). The government believes the changes will cut tobacco consumption by 6 per cent and the number of smokers by 2 or 3 per cent - totalling roughly 87,000 Australian smokers.

Internet advertising of cigarettes will also be restricted, and an extra $27.8 million will be spent on anti-smoking campaigns.

Health Minister Nicola Roxon said 15,000 people a year were dying from tobacco-related illnesses. When she was a young child her father, who smoked, died from cancer of the oesophagus. “If our action today can mean that any other child has their parents with them for a little longer, that'll be a good thing. And we don't make any apologies about taking this action,” she said.

Opposition health spokesman Peter Dutton earlier today supported an increase in the tobacco excise but questioned the timing of the cigarette packaging announcement by the Rudd government.

References: Big tobacco to fight Rudd's cigarette plain packaging plan, Joe Kelly, Sid Maher and AAP, From: The Australian, 4/29/2010; Australia proposes plain packs for cigarettes by BETTINA WASSENER AND MERAIAH FOLEY, NEW YORK TIMES, 05/02/2010