Australia wins WTO tobacco packaging case

A LANDMARK legal win upholding Australia’s plain packaging tobacco laws will give the green light for other countries to roll out similar measures.

Plain cigarette packaging. Picture: Alan Pryke/Newspix /Rex Features

THE landmark Australian law on restrictive tobacco packaging, better known as plain packaging, has been upheld at the World Trade Organization after a five-year legal battle, Bloomberg news reports citing two people familiar with the situation.

The news is a blow to the tobacco industry as a WTO ruling was widely anticipated to give a green light for other countries to roll out similar laws. It could have wider implications for alcohol and junk food packaging. The rules, introduced in 2010, go further than health warnings, banning logos and distinctive-coloured cigarette packaging in favour of drab olive packets with brand names printed in small standardised fonts.

Tobacco firms said their trademarks were being infringed, while Cuba, Honduras, Dominican Republic and Indonesia complained at the WTO that the rules constituted an illegal barrier to trade.

Although the WTO’s final ruling is not expected until July, a confidential draft said Australia’s laws were a legitimate public health measure, Bloomberg reported.

A WTO official confirmed the draft was sent to parties to the dispute on Tuesday but said the WTO doesn’t comment on confidential reports.

Imperial Brands’ profits are most exposed to markets that may implement plain packaging, said analysts at Jefferies.

A spokeswoman for British American declined to comment on the ruling until it was made public, but suggested the complainants would keep fighting. A spokeswoman for Japan Tobacco also declined to comment on the ruling, but said the fact that the draft had been leaked was disconcerting and a breach of WTO rules.

A spokesman for Imperial declined to comment and Philip Morris, the world leader, was not immediately available.

The plodding pace of WTO decision-making prompted Australia, which had the backing of the World Health Organization, to complain that its challengers were deliberately stalling the proceedings, producing a “regulatory chilling” effect on other countries wishing to follow its example.

But since the challenge was made, many other countries began exploring similar legislation, a sign they expected the WTO to rule in Australia’s favour. Britain, France and Hungary have gone ahead with their own legislation, while Ireland, Canada, South Africa, New Zealand and Belgium are among those considering it.