[Ip-health] Bloomberg: Tobacco Logo Ban Said to Get WTO Backing in Landmark Case

Thiru Balasubramaniam thiru at keionline.org
Fri May 5 00:17:50 PDT 2017


Tobacco Logo Ban Said to Get WTO Backing in Landmark Case

by Bryce Baschuk
May 4, 2017, 1:33 PM GMT+2 May 4, 2017, 3:35 PM GMT+2

The World Trade Organization upheld Australia’s right to impose
plain-package label restrictions on the sale of tobacco products, dealing a
blow to the cigarette industry, according to two people close to the

A WTO dispute-settlement panel backed Australia’s argument that the rules
it set in 2011 don’t violate trade law because they qualify as a legitimate
public health measure, the people said, asking not to be identified because
the decision isn’t yet public. The initial notification of the ruling was
circulated to the parties of the dispute on May 2, according to a spokesman
for the WTO who declined to comment on its content.

The decision could usher in a new wave of global tobacco restrictions from
other countries that have sought to deter smoking among their citizens
through the use of plain packaging rules. Australia was the first country
to prohibit tobacco logos, and many countries have hesitated to implement
such measures after four tobacco-producing countries filed complaints in
2012 and 2013. Philip Morris International Inc. and Japan Tobacco Inc. have
argued that such rules could set a precedent for other countries to
implement new labeling rules for tobacco, alcohol and junk food.

Imperial Brands Plc, which sells cigarettes under the Kool and Gauloises
brands, led declines among tobacco stocks, dropping as much as 2.8 percent.
Plain packaging may hurt smaller cigarette makers the most if smokers
increasingly adopt the best-known options such as Marlboro or Camel given
the absence of marketing. Imperial said Wednesday it’s testing caffeine
energy products and planning to expand more in e-cigarettes as more
countries enact plain packaging rules.

“This is not good news for the cigarettes industry in the long-term,”
Eamonn Ferry, an analyst at Exane BNP Paribas, said by email. “If plain
packaging talks hold in emerging markets, the opportunity to trade-up
consumers to higher priced brands may be hindered.”

The full WTO ruling will be released in July, the people said. The parties
to the ruling -- including Cuba, the Dominican Republic, Honduras and
Indonesia -- will then be permitted to appeal the decision, according to
WTO rules.

Australian trade officials in Canberra and Geneva did not respond to
requests for comment. Philip Morris didn’t respond to requests for comment
and a spokeswoman for Japan Tobacco Inc. said the company had not seen a
copy of the ruling.

The cases were launched in 2012 and 2013. The countries that complained
argued that Australia’s plain packaging law imposed unfair restrictions on
the use of trademarks, geographical indications and other markings in
violation of several WTO agreements.

Legislators in France, Hungary, Ireland, New Zealand, Norway, Slovenia and
the U.K., have already adopted their own plain packaging rules and similar
laws are under consideration in Canada, Turkey, Singapore and South Africa.

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