29 Jun 2018

Australia wins landmark WTO ruling on plain tobacco packaging

11:34 am on 29 June 2018

Australia has won a clear victory in a major trade dispute over its plain-packaging tobacco law.

Illustration of a neutral cigarette packet, in Paris, on September 8, 2015. French government wants to reintroduce neutral cigarette packaging in his new draft Health law.

An illustration of plain packaging used in the French government's push for similar laws in September. Photo: AFP

A panel of judges at the World Trade Organisation has rejected a complaint brought by Cuba, Indonesia, Honduras and Dominican Republic that the packaging unjustifiably infringes tobacco trademarks and violates intellectual property rights.

The WTO panel said Australia's law improved public health by reducing the use of tobacco products, rebuffing claims that alternative measures would be equally effective.

Australia's law, introduced in 2010, bans logos and distinctively-coloured cigarette packaging in favour of drab olive packets that look more like military or prison issue, with brand names printed in small standardised fonts.

The challenge to it was seen as a test case for public health legislation globally and could lead to tighter marketing rules for unhealthy foods and alcohol as well as tobacco.

Honduras indicated that it was likely to appeal, saying in a statement that the ruling contained legal and factual errors and appeared not to be even-handed, objective or respectful of the complainants' rights.

"It appears that this dispute will require the review of the panel's findings by the WTO Appellate Body before any final conclusions can be drawn," it said.

An Indonesian trade official said Indonesia would examine its options.

Cuban and Dominican trade officials were not immediately available for comment.

Australia said it was ready to defend against an appeal.

Dangerous precedent

"We will not shy away from fighting for the right to protect the health of Australians," Trade Minister Steven Ciobo and Rural Health Minister Bridget McKenzie said in a statement.

"Australia has achieved a resounding victory."

The World Health Organization welcomed the WTO ruling, saying it cleared "another legal hurdle thrown up in the tobacco industry's efforts to block tobacco control and is likely to accelerate implementation of plain packaging around the globe."

The New Zealand government had been eyeing the Australian case after passing plain packaging legislation in 2016.

The new green packaging with health warning images came into force in March this year.

WHO said five other countries had also brought in plain packaging laws - Hungary, Ireland, France, Norway and Britain - while another six had passed laws yet to be implemented - Burkina Faso, Canada, Georgia, Romania, Slovenia and Thailand.

"A number of other countries are examining the policy," the WHO added.

Vera Luiza da Costa e Silva, head of the secretariat of the WHO's Framework Convention on Tobacco Control, said there was already a "domino effect", with countries moving towards Australian-style rules and seeing them as a way towards the "endgame" with less than 5 percent of the population smoking.

International trade director at Japan Tobacco International Geir Ulle said the decision was a major step backwards for the protection of intellectual property rights internationally.

"It sets a dangerous precedent that could encourage governments to ban branding on other products without providing any reliable evidence of benefits to public health," Ulle said, adding that recent data showed plain packaging was not working.

"This ruling doesn't make the policy right or effective, nor does it make it worth copying."

- Reuters / RNZ