Tough cigarette rules in Aus

2010-04-29 09:23

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 on Thursday by Australia's government, which dubbed the move a world-first.

The rules, which would take effect July 1 2012, would ban tobacco companies from including logos, promotional text or colourful images on cigarette packages. A government health warning 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," Prime Minister Kevin Rudd said.

The government also announced it would increase the cigarette tax by 25%, driving up the price of a pack of 30 cigarettes by about A$2.16 ($2). 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 spokesperson Cathie Keogh told Australian Broadcasting Corp radio, adding the company plans to take legal action.

Compensation

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 Chair of Australian supermarket chain IGA, said in a statement. "That amounts to a direct attack on approximately 16% 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 tobacco companies will likely demand compensation over the forced packaging changes, which could cost taxpayers around A$3bn a year.

"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."

- AP