June 14, 2010 - The Chamber of Commerce of the United States of America (chamber) in a letter to opposition finance spokesman Andrew Robb expressing its "concern" about the plain-packaging proposal, flagged by the government in April 2010.
Australia would be the first country in the world to force cigarette companies to use plain packaging. From 2012, the companies will only be allowed to print their brand name in a standard style and there will still be graphic health warnings on the packaging. (Australia - tobacco tax increase now in force, next comes plain tobacco packaging..)
The chamber has entered the political fray over the government's plans to introduce plain packaging for cigarettes from 2012, claiming the move will breach international trade rules and undermine foreign business confidence in Australia.
Concern" about the plain-packaging proposal: "We do not take issue with the intention to promote public health, but we are concerned that the plain-packaging proposal seems to ignore international intellectual property norms, particularly relating to trademark law," Myron Brilliant, the chamber's senior vice-president, international, said. The move could weaken both the "intrinsic and extrinsic" value of trademarks registered for use in Australia, he said.
"Companies rely on trademarks to protect their reputation and their products."
When the plan was first suggested last year it was opposed by powerful US interests, including the US Chamber of Commerce, a business lobby group based in Washington.
British American Tobacco Australia says it opposes the plan and is surprised the announcement has been made while a Senate inquiry into the issue is underway. It says the move could bolster the black market tobacco industry, leading to lost tax revenue and more underage smoking. Imperial Tobacco Australia spokeswoman Cathie Keogh says her company is now looking at its legal options. "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," she said. "It really affects the value of our business as a commercial enterprise and we will fight to support protecting our international property rights." She warns the move may actually be to the detriment of public health. "If the tobacco products are available in the same easy-to-copy plain packaging, it makes it much easier for counterfeiters to increase the volume of illicit trade in Australia, which is currently reported at about 12 per cent of the market," she said.
Health Minister Nicola Roxon says the legislation will be carefully drafted to hold up against any legal challenge. "We have firm advice that this action can be taken," she said. "Tobacco companies will hate the decision, but it will help people stop smoking." "We believe this decision should have been taken a decade ago. The last government squibbed that decision but this government won't." (Cigarette legislation will withstand legal challenges: Roxon, Samantha Hawley, ABC News, 4/29/2010)
Professor Mike Daube, from West Australia's Curtin University, who was part of a preventative health task force that recommended plain packaging, said the government's decision was a huge breakthrough. 'We can be absolutely sure that this will accelerate the decline in smoking,' he said.
Greens leader Bob Brown says his party will back up the Government if tobacco companies take up the fight. "If they do that, the Greens will move to have the tobacco companies pay the cost to the public health system," he said. The Greens are the fastest-growing political party in Australia.
The chief executive of the Cancer Council, Professor Ian Olver, also welcomed the government's move, describing it as groundbreaking policy. "It's a very important move for the Government," he said. "We applaud them because this actually makes Australia take the lead again in tobacco control. "The reason tobacco companies are upset is they understand how effective this move will be." He says the policy will bring huge benefits and cut cancer rates. "It stops tobacco companies being able to attract young people with brightly coloured packs and it will stop them blunting health warnings. It's really the last form of advertising they have," he said.
The Australian Broadcasting Corporation said that research had shown that industry branding and packaging design reduced the effectiveness of graphic health warnings about smoking.
The Australian tobacco market generated total revenues of about £5 (7.4 USD) billion in 2008, a growth rate of nearly three per cent since 2004.
Reference: US chamber of Commerce warns on plain cigarette packs, Sid Maher, The Australian, 6/5/2010; Tobacco companies rally against plain packaging, Liv Casben and staff, Efficient Farming, 4/29/2010.