Fri, Apr 30, 2010 - Page 1 News List

Australia proposes tough cigarette packaging rules

AP , SYDNEY

Tobacco companies would be forced to use plain, logo-free packaging on their cigarettes in a bid to make them less attractive to smokers under legislation introduced yesterday by Australia’s government, which dubbed the move a world-first.

The rules, which would take effect on July 1, 2012, would ban tobacco companies from including logos, promotional text or colorful images on cigarette packages. Graphic health warnings would be prominently displayed instead, with the brand name relegated to tiny, generic font at the bottom.

“The new branding for cigarettes will be the most hard-line regime in the world and cigarette companies will hate it,” Australian Prime Minister Kevin Rudd said.

The government also announced it would increase the cigarette tax by 25 percent, driving up the price of a pack of 30 cigarettes by about A$2.16 (US$2). The tax was to go into effect yesterday.

Tobacco companies immediately blasted the packaging crackdown, and vowed to fight it in court.

“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 Australian Broadcasting Corp radio, adding that the company plans to take legal action.

Retailers said the tax hike would hurt their businesses and bolster the cigarette black market.

“It’s a lazy policy response being pushed by some health advocates,” Mick Daly, National Chairman of Australian supermarket chain IGA, said in a statement. “That amounts to a direct attack on approximately 16 percent of Australians who have made legal and legitimate lifestyle choices.”

Tim Wilson, director of intellectual property and free trade at Australia’s Institute of Public Affairs, said taxpayers could end up paying around A$3 billion a year in compensation to tobacco companies.

“Under Australia’s Constitution, if the government basically takes someone’s property rights including intellectual property such as trademarks, or devalues them to a significant extent, they have to provide compensation,” Wilson said. “I’d be shocked if they didn’t [pursue compensation], because if it happens here, it’ll happen all over the world.”

Opposition leader Tony Abbott dismissed the tax hike as a cash grab, and said he wanted evidence that changing the packaging would reduce smoking.

“I’m not in the business of defending smoking, I want to make that absolutely clear. But I also want to make absolutely clear that this is not a health policy — this is a tax grab,” Abbott said.

Australia has banned tobacco ads from print, television and radio for years. The new proposal would also restrict Internet advertising.

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