Bloomberg News

Australia Targeted in WTO Complaint Over Ban on Tobacco Logos

March 13, 2012

Ukraine complained at the World Trade Organization over Australia’s decision to prohibit trademarks and logos on tobacco products, saying the ban violates global rules on intellectual property.

Australia is the first country to require plain, identical cigarette packaging. As of Dec. 1, 2012, cigarettes there will have to be sold in dark brown packets, with no company logos or images and the same font for all brands. Imperial Tobacco Group Plc (IMP), British American Tobacco Plc (BATS) and Japan Tobacco Inc. (2914) are among companies that have challenged the law, which Australia is extending to include cigars and loose-leaf tobacco products.

Ukraine says the scientific evidence on which the law is based was insufficient and that the plain-packaging rules will unnecessarily curb trade because Australia’s public-health goal can be met by other means.

“The government has consistently engaged with World Trade Organization members with regard to the plain-packaging measure, and will participate in consultations in a constructive manner,” Australian Trade Minister Craig Emerson said in an emailed statement today. “Australia is prepared to defend any challenge that might result from the consultations.”

Smoking kills 15,000 Australians annually and costs about A$31 billion ($33 billion) in yearly health and workplace expenses, the government says. With 15 percent of the population aged 14 or over smoking daily, it’s the country’s top drug and preventable health issue, officials there say.

Tobacco Treaty

The World Health Organization’s Framework Convention on Tobacco Control, the first international treaty aimed at cutting tobacco use, includes provisions on non-pricing measures to lower demand, including regulations on packaging and labeling.

While the treaty doesn’t specifically address the use of trademarked brands or logos, it requires signatories to ensure that packaging and labeling don’t promote a tobacco product by “any means that are false, misleading, deceptive or likely to create an erroneous impression about its characteristics, health effects, hazards or emissions.”

WHO Director-General Margaret Chan said on Nov. 23 that major tobacco companies were harassing governments including Australia, Norway and Uruguay in a bid to overturn cigarette package-labeling rules.

The request for consultations is the first step in the case and means the governments must now hold talks for at least two months in a bid to resolve the dispute. After that, Ukraine can ask WTO judges to rule. Judges typically rule within six months, after which either side can appeal.

To contact the reporter on this story: Jennifer M. Freedman in Geneva at jfreedman@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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