Feb. 19 (Bloomberg) -- New Zealand is set to become the first country after Australia to pass a law requiring that cigarettes be sold in plain packages.
New Zealand’s government will bring in the legislation to cut the appeal of smoking, although it will delay implementation until legal disputes faced by Australia are resolved, Associate Minister of Health Tariana Turia said in a statement today.
“We cannot continue to allow tobacco companies to use sophisticated packaging designs to promote their products,” Turia said. “There is a risk that tobacco companies will try and mount legal challenges against any legislation, as we have seen in Australia.”
In Australia, cigarette packages since Dec. 1 include warnings that include photos of a gangrenous limb and a cancer victim. All cigarettes in Australia must be sold in the uniform packs, with the brand name relegated to the bottom quarter of the package on a drab brown background. The law is being challenged at the World Trade Organization and at arbitration.
“This is a major step,” Skye Kimura, Tobacco Control Adviser for the Cancer Society of New Zealand said of the government’s proposal. “This is another milestone in the journey to New Zealand being smoke-free by 2025.”
The government announcement ignores the result of a public consultation process that ended Oct. 5, The New Zealand Association of Convenience Stores said in a statement.
“Of the 20,000 people that took the time to submit their views, over 11,800 opposed the idea,” Roger Bull, chairman of the association, said in the statement. “By ignoring them, the government is sending a clear message to them that they don’t care about more costs being forced onto the retail sector.”
British American Tobacco Plc’s New Zealand unit said it remains opposed to the introduction of plain packaging in the country.
“While we can’t rule out legal action at this stage, we can say that we will fully participate in the legislative process,” Steve Rush, general manager at BAT’s unit, said in an e-mailed statement.
Cigarettes kill 5,000 New Zealanders each year, Turia said. She said the consultation process confirmed plain packaging will be effective in removing the impression that tobacco may be less harmful than it is.
The law works in Australia, Fiona Sharkie, executive director at Quit Victoria, said in an e-mailed statement. After the introduction of plain packs, the number of calls to the group’s Quitline spiked with the number of callers sourcing the number from cigarette packages rising to 36 percent from 23 percent, she said.
British American Tobacco, maker of Dunhill, Pall Mall and Australia’s best-selling cigarette brand, Winfield, unsuccessfully sued to block the Australian law, because the country didn’t get any benefit from the removal of trademarks, according to the High Court of Australia.
Philip Morris International Inc. is also pursuing the case in international arbitration. The Australian proposal violates a treaty with Hong Kong and may cause billions of dollars in damages, the maker of Marlboro cigarettes said.
“There is no credible evidence that plain packaging will lower smoking rates, but strong evidence it breaches international trade rules,” Philip Morris said in an e-mailed statement today.
The World Trade Organization has agreed to hear a complaint from tobacco producing nations led by Ukraine that Australia’s law breaches international trade agreements and constitutes an unjustifiable encumbrance on the use of trademarks. The WTO hasn’t set a date for a hearing.
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