Australia wins landmark WTO ruling on plain tobacco packaging

The World Trade Organization panel said Australia’s “plain packaging” law contributed to improving public health by reducing use of and exposure to tobacco products.
The World Trade Organization panel said Australia’s “plain packaging” law contributed to improving public health by reducing use of and exposure to tobacco products.PHOTO: REUTERS

GENEVA (RETUERS) - Australia triumphed on Thursday (June 28) in a major trade dispute over its pioneering “plain” tobacco packaging law, with World Trade Organization (WTO) judges rejecting a complaint brought by Cuba, Indonesia, Honduras and Dominican Republic. 

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. It also rejected the argument that  Australia had unjustifiably infringed tobacco trademarks and violated intellectual property rights. 

The dispute 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’s law goes much further than advertising bans and graphic health warnings seen in other countries.  Introduced in 2010, it 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 World Health Organization welcomed Australia’s victory. 

“The ruling clears 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 WHO said in a statement. 

It said six other countries had brought in plain packaging laws – Hungary, Ireland, France, New Zealand, 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 per cent of the population smoking. 

Geir Ulle, International Trade Director at Japan Tobacco International, 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.”