Honduras Complains at WTO Over Australia Tobacco-Logo Ban

Honduras complained at the World Trade Organization about an Australian law that prohibits the display of tobacco companies’ logos, labels and trademarks, saying the ban violates global rules on intellectual property.

As of Dec. 1, cigarettes in Australia will have to be sold in dark brown packets, with no symbols or images and the same font for all brands. Philip Morris International Inc. (PM), Imperial Tobacco Group Plc (IMP), British American Tobacco Plc (BATS) and Japan Tobacco Inc. (2914) are challenging the law and will present their arguments against it in Canberra beginning April 17.

“Honduras has decided to take this action given that Australia’s law contravenes several WTO obligations on intellectual-property rights and technical barriers to trade, and given the serious economic consequences that this measure would have on Honduran tobacco exports,” the country’s WTO ambassador, Dacio Castillo, said in an e-mailed statement.

Today’s complaint at the Geneva-based trade arbiter follows a similar move by Ukraine on March 15. The two governments say the scientific evidence on which Australia’s law is based is insufficient and that the plain-packaging rules will unnecessarily restrict trade because Australia’s public-health goal can be met by other means.

Smoking Deaths

Smoking kills 15,000 Australians annually and costs about A$31 billion ($32 billion) in yearly health and workplace expenses, the government says. With 15 percent of the population 14 years old or over smoking daily, it’s the country’s top drug and preventable health issue, Australian officials say.

The tobacco industry employs several hundred thousand people directly and indirectly in Honduras, Castillo said, adding that “this translates into tens of millions of dollars for the economy.”

The Honduran complaint will probably be joined with Ukraine’s. Today’s 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, WTO judges can be asked to rule. Rulings are typically made 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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