Multinationals oppose plain packs plan but applaud ‘pragmatic’ postponement

| February 20, 2013

While opposing the planned introduction of standardized packaging for tobacco products in New Zealand, two multinationals have welcomed news that the country is to delay a decision on implementation until the resolution of World Trade Organization disputes involving Australia, the only country so far to have introduced such packaging.

‘In her official statement earlier today [February 19] announcing New Zealand’s plans regarding standardized packaging, Health Minister Tariana Turia said, “the Government will wait and see what happens with Australia’s legal cases, making it a possibility that if necessary, enactment of New Zealand legislation and/or regulations could be delayed pending those outcomes,” Philip Morris International said in a note posted on its website.

‘This announcement demonstrates that the New Zealand government recognizes the significant international trade issues with standardized packaging and will not implement it until the pending international legal challenges to Australia’s law are resolved.

‘There is no credible evidence that standardized packaging will lower smoking rates, but strong evidence that it will jeopardize jobs, benefit the black market for cigarettes, and is a breach of international trade rules that have already made Australia’s policy subject to WTO action.’

PMI said there were three avenues of litigation that had been and are being pursued against the Australian government in relation to this legislation: one at the domestic level and two at the international level. While the domestic case had been decided, the international cases remained open and unresolved.

‘Currently three countries have initiated proceedings against Australia before the World Trade Organization (WTO) on the ground that the standardized packaging legislation is contrary to Australia’s obligations as a WTO member,’ the PMI note said. ‘Philip Morris Asia (PMA) is also suing Australia for multiple breaches of its Bilateral Investment Treaty (BIT) with Hong Kong. Decisions in these cases are expected within two to three years.

‘In broad terms, these cases will examine a number of issues, including:

* ‘Whether there is any valid evidence that standardized packaging will reduce smoking rates;

* ‘Whether there are effective, less restrictive alternatives that Australia could have implemented instead;

* ‘Whether standardized packaging breaches Australia’s international trade and treaty obligations

* ‘Whether the Australian government will need to pay compensation to PMA.’


Meanwhile, Kingsley Wheaton, director of corporate and regulatory affairs at British American Tobacco, said that his company understood the reasons why the New   Zealand government had taken the pragmatic step of deferring its decision regarding plain packaging.

“The New Zealand government has listened to the many arguments for and against this regulatory measure and has acknowledged both the importance of the issue to its trade obligations, as well as the impending World Trade Organization challenge that Australia is currently facing,” he said.

“We support reasonable and evidence-based regulation but there is still no credible evidence to suggest plain packaging will support the New Zealand government’s stated public health objectives. In fact, ill-thought through regulation, like plain packaging, brings with it the very real threat of serious unintended consequences, such as a rise in the number of smokers willing to turn to the black market.

“Furthermore, plain packs play right into the hands of the counterfeiters who are ready and waiting to supply people, regardless of their age, with cheap tobacco products.

“We remain opposed to the plain packaging of tobacco products not only because of the lack of credible evidence to suggest it will deliver its policy aims but also due to the likely and serious unintended consequences.”

Category: Breaking News

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