Australia Fights Tobacco With Taxes and Plain Packs

April 29, 2010 (New York Times)
Australia Fights Tobacco With Taxes and Plain Packs
By BETTINA WASSENER and MERAIAH FOLEY
Australia could become the first nation to ban brand images and colors on cigarette packages under a wide-ranging set of antismoking measures that the government unveiled Thursday.

Starting July 1, 2012, tobacco products would have to be sold in the plainest of packaging — with few or no logos, brand images or colors. Promotional text would be restricted to brand and product names in a standard color, position, type style and size, rendering them not unlike the bland boxes that carry generic prescription drugs.

Restrictions on Internet advertising, a hefty increase in the tax on tobacco products and new antismoking campaigns are also among the initiatives.

The government said the moves would cut tobacco consumption and generate billions of dollars of revenue that would be plowed into the health system. The action won praise from the World Health Organization, which welcomed the measures as “a new gold standard for the regulation of tobacco products.”

The proposals would radically limit how tobacco companies can design packaging, and remove, in the words of the Australian government, “one of the last remaining frontiers for cigarette advertising.”

Leading tobacco companies strongly criticized the measures, questioning their effectiveness and saying they would encourage counterfeiting.

“Plain packaging has not been introduced in any country in the world and there is no evidence to support the government’s notion that this will reduce consumption,” Imperial Tobacco said in a statement from its Sydney office. “Plain packaging would seriously harm our brands and infringe the intellectual property rights in which both Imperial Tobacco and its shareholders have invested.”

Philip Morris International declined to say whether it would take legal action against the measure but argued that the imposition of plain packaging would represent “an unconstitutional expropriation of valuable intellectual property, violating a variety of Australia’s international trade obligations.”

British American Tobacco’s Australia unit echoed this, saying it believed that the plain packaging proposals “would not hold up to close scrutiny.”

But in a TV broadcast, Prime Minister Kevin Rudd said, “We, the government, will not be intimidated by any big tobacco company.”

Cigarette boxes would continue to carry graphic health warnings, including photographs of the effects of smoking-related diseases. Currently some boxes show a mouth infected with cancer and a gangrenous foot, said Simon Chapman, a professor of public health at the University of Sydney and a member of the National Preventative Health Taskforce, which recommended the new plain packaging.

The measures announced on Thursday also include a 25 percent increase in the excise tax on tobacco products, which was to come into force as of midnight. That will increase the cost of a packet of 30 cigarettes by about 2.16 Australian dollars, to around 16.70 Australian dollars ($15.40).

According to the government, that measure alone is expected to reduce tobacco use by about 6 percent. The government said that as of 2007, 16.6 percent of Australians over age 14 smoked.

The additional tax revenue, estimated to total 5 billion Australian dollars over four years, would be invested in the nation’s health system, the government said.

The government will have to submit the proposal on the packaging changes to Parliament.

Next month in the United States, a rule banning the sale and marketing of tobacco products to teenagers, which was first proposed 15 years ago, will go into full effect. The rule was never adopted by the Food and Drug Administration because the Supreme Court had ruled that legislation was needed to empower the F.D.A. to regulate tobacco products. That legislation passed in 2009 and was signed by President Obama last June.