UK government, tobacco firms on collision course

The UK’s lower house yesterday voted by 367 to 113 in favor of requiring that cigarettes and roll-your-own tobacco should be sold only in standardized packaging from May next year, according to a Telegraph story relayed by the TMA.

The measure now has to be debated by the country’s upper house.

The requirements would apply only to England initially, but Wales has indicated that it would follow suit, while Scotland and Northern Ireland are considering the issue.

A Reuters story indicated that a YouGov opinion poll conducted in February found that 72 percent of the British public supported standardized tobacco packaging while 15 percent opposed it.

British American Tobacco said yesterday that it would start a legal challenge against the UK government if the upper house also supported the bill.

“This legislation is a case of the UK government taking property from a UK business without paying for it,” said Jerome Abelman, corporate and regulatory affairs director, in a press note posted on the company’s website. “That is illegal under both UK and European law.

“Legal action is not something we want to undertake, nor is it something we enter into lightly – but the UK government has left us with no other choice after running what can only be described as a flawed consultation process. Any business that has property taken away from it by the state would inevitably want to challenge and seek compensation.”

In a note to editors after the end of the press note, BAT admitted that it had not been successful in its challenge of Australia’s standardized packaging legislation, which came into effect in December 2012. But it said that that failure had been due to a ‘unique requirement in the Australian constitution that meant it would only win the case if it could prove the Australian government had received a benefit by removing its brands’. ‘That requirement does not exist in the UK’, BAT said.

Imperial Tobacco said also that it would ‘regrettably be left with no choice’ but to challenge standardized tobacco packaging legislation should it pass into law.

Meanwhile, writing on Spiked, Patrick Basham of the Democracy Institute wrote that a court settlement in favor of the tobacco industry could cost the UK treasury up to £12 billion.

If the legal bill to the country’s taxpayers, which include the tobacco companies, is that high, a lot of people will probably want to know why the government, which is seen as a business-friendly government, seemed to ignore the results of its consultation process, why it didn’t go along simply with EU requirements for an increase in the size of health warnings, and why it rushed the proposals through just before the country was going to the polls in a general election, which is due in May.

At least they will expect that the £12 billion is recouped not through dumping more austerity on ordinary people, but through some other means – perhaps a windfall tax on tobacco companies, which both of the major parties have alluded to in the recent past.