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Big Tobacco is losing the fight to stop plain packaging of cigarettes

Dr Enrico Bonadio, a Senior Lecturer in the City Law School, says the tobacco industry’s bid to avoid plain packaging by relying on legal arguments around trade and intellectual property rights, is being systematically dismissed by courts around the world.

You may already have seen the tobacco packs currently sold in the UK: a dark, murky green colour with large graphic health-warning images and scary messages aimed at informing current and potential smokers about the devastating consequences of tobacco consumption. They have no colourful logos, with the brand name just displayed in small characters in a standard font.

These packs are now required by new regulations which entered into force in May 2016. There has been a one-year transitional period for the sell-through of old stock – and from May 20 2017 all tobacco products on sale in the UK must comply with the new rules.

The legislative move has been recommended to all countries by the World Health Organisation to reduce the attractiveness of smoking and eventually reduce consumption. Australia was the first country to introduce such strict packaging requirements in December 2012. France and, of course, the UK have since followed suit.

It follows significant research that shows these new standardised cigarette packs are much less appealing to consumers – and young people especially.
The industry’s legal defeats

No wonder tobacco companies have challenged the measure in the courts. They have argued that it is useless, too harsh – and is an infringement of their fundamental and intellectual property rights, especially trademarks. Yet, their claims are based on weak arguments and have been rejected by both the High Court of England and Wales and the Court of Appeal.

The tobacco industry has faced numerous courtroom defeats of late. Last year Uruguay won a landmark case against the Swiss giant Philip Morris International. The company had sued the Latin American state after it introduced two measures affecting tobacco packaging and trademarks. These were mandatory graphic health warnings covering 80% of cigarette packets (a measure very close to plain packaging) and the obligation for tobacco companies to adopt a single presentation for their brands, dropping for example the “gold” and “blue” descriptors, that could lead smokers to believe one variant was safer than another.

The fact that the courts sided with Uruguay would have been encouraging to other countries aiming to introduce controls on tobacco packaging. And even greater encouragement came recently from a World Trade Organisation ruling which deemed that the plain packaging requirements introduced by Australia as compliant with international trade and intellectual property rules – and are therefore a legitimate public health measure.

The decision has not been officially announced, but a confidential draft of the interim ruling was leaked to the media and the final decision is expected later this year. The Australian measure had been challenged at the WTO tribunal by Cuba, Dominican Republic, Indonesia and Honduras, countries whose economies strongly rely on the tobacco industry.

A domino effect

This is a blow to the industry. The short-term consequences of the WTO ruling – Imperial Tobacco’s shares fell more than 2% after the decision was leaked – reflects the longer-term danger that this ruling poses. It will likely convince other states to introduce plain packaging legislation without fear of violating international trade and intellectual property laws. It basically gives them a green light by removing the regulatory chilling effect that such legal action has produced on countries that wanted to follow Australia’s example.

After all, more and more countries seem interested in adopting standardised packaging. As well as France and the UK, Ireland and Norway will introduce packaging restrictions later in 2017, and Hungary in 2018. Many other states are debating similar measures, including New Zealand, Canada, Belgium, Slovenia, Belgium, Singapore and Thailand.

So, a legislative trend has started which aims to restrict the ability of tobacco manufacturers to make their products appealing to consumers by using eye-catching words, logos or ornamental features on the pack. And attempts by Big Tobacco to stop it by relying on legal arguments around trade and intellectual property rights are being systematically dismissed by courts around the world.

Ultimately, the industry needs to accept the fact that its ability to use fancy brands, especially on packaging, may be reduced by governments for public health reasons. Also that a company’s property rights are not absolute or untouchable. Not only does it not have enough legal basis – as has now been confirmed by several courts and tribunals – but it also disregards legitimate policies adopted by democratically elected governments.

Hungary regulates cigarette market further

Regulation of electronic cigarettes will further strengthen in Hungary as e-cigarettes and related products are expected to be treated the same as regular tobacco products in Hungary, under a bill Cabinet Chief János Lázár submitted to Parliament Tuesday, according to Hungarian news agency MTI.

If the bill is approved by Parliament, e-cigarettes could only be sold in licensed tobacco shops, the text of the bill says, according to MTI, which apparently means that only national tobacco shops will be eligible to sell such products.

The text of the bill says the regulatory changes aim to reduce smoking in Hungary, especially among the younger generation, while the country is required to comply with certain European Union directives.

The bill Lázár submitted would also abolish a progressive healthcare contribution tobacco companies must pay, after the European Commission expressed concerns in July related to the discriminatory nature of the contribution.

Hungary will soon introduce plain and uniform cigarette packaging and ban the distribution of flavored tobacco products. Under a decree published earlier this week, retailers of e-cigarettes will be required to pay additional fees.

Hungary to introduce fees for e-cigarettes

As another step in further regulating the market, the Hungarian government is foreseen to levy many new fees on retailers and sellers of electronic cigarettes from November, Hungarian news agency MTI reported today, based on a decree published in the latest issue of the official gazette Magyar Közlöny.

An administration fee of HUF 475,000 on sellers of e-cigarettes will be introduced, along with a separate fee businesses will be required to pay for every brand and strength of nicotine and nicotine-free e-cigarette as well as refill cartridges they sell, according to the decree.

Additionally, businesses will be forced to pay a HUF 306,000 fee, per item, for any modifications to the range of products they sell.

Revenue from the fees will go to the National Institute of Pharmacy and Nutrition (OGYEI), according to MTI.

Plain cigarette packs to hit shelves Saturday

A regulation requiring cigarettes to be sold in uniform plain packaging comes into effect this Saturday. However, brands already on the market will receive a temporary exemption, online daily reported.

In harmony with European Union regulations, Hungary is introducing measures under which menthol cigarettes will be banned and tobacco products can be sold only in uniform packaging in the country. The Hungarian government was first said to be planning such changes in June 2015. Professionals working in the tobacco industry have criticized the measures, claiming they will not reduce the consumption of tobacco products.

Under the EU’s Tobacco Products Directive (TPD), as of May 20, 2017, cigarette packets on sale should meet strict criteria. The TPD regulates that both the largest surfaces of tobacco product packets must contain warnings amounting to 65% of the surface area, while similar warnings must also appear on the top of packets. Hungary is also introducing uniform packaging – void of brand logos, with the product brand and all other type printed in a uniform font – and the banning of flavored cigarettes.

Already existing brands can be purchased by retailers in their current packaging until the end of the year, and can be sold until May 20, 2017, as part of a temporary exemption. By May 20, 2019, at the latest, all retailers need to conform with the regulations. By May 20, 2020, flavored cigarettes must disappear from shelves.

BAT eyes HUF 3 bln capacity investment

The Hungarian subsidiary of British American Tobacco (BAT) is planning to increase production capacity at its Hungarian plant in Pécs through an investment of HUF 3 billion, foreseen to create 200 new jobs, Minister of Foreign Affairs and Trade Péter Szijjártó announced yesterday.

BAT is eliminating certain capacities in Western Europe and is planning to move investment to Hungary, due to an overhaul of the company’s European production strategy, Hungarian news agency MTI reported.

Szijjártó said the headcount at the Pécs plant is foreseen to reach 800 as a result. Richard Widmann, CEO of BAT Central Europe, noted that the company has invested more than HUF 57 bln in the country since 1992, and its unit has become one of the biggest investors and employers here.

Szijjártó added that the Hungarian Investment Promotion Agency (HIPA) is currently in negotiations with seven other British companies planning to make further investments in Hungary. The minister noted that trade between the two countries was up by 15%, reaching €5 billion last year.

Disgraceful effort to privilege tobacco business interests over public health has rightly failed utterly – other countries to follow UK lead

The High Court challenge to the Regulations on Standardized Plain tobacco packaging by the tobacco industry met with a humiliating defeat on Thursday, 19th of May 2016.

Thus the landmark judgment in the case will help other countries looking forward to introduce Plain Packaging. France and the Republic of Ireland have already passed legislations and other countries including Canada, Hungary, Norway and Solvenia, are expected to follow soon.

It is learnt that tobacco industry has spent millions of pounds on some of the most expensive lawyers in the country with the hope of blocking the policy. This landmark judgment is a severe defeat for the tobacco industry and it fully justifies the determination of the government to go ahead with the introduction of standardized packaging.

The standardized packaging regulations would come into effect in the UK on Friday, the 20th May 2016. All cigarettes manufactured for sale in the UK after this date must comply with standardized packaging regulations. Cigarettes and hand rolling tobacco will be sold in drab brown packages which have had all the attractive features and colours removed.

The judgment by the Justice Green rejects every argument the industry put forward in court. It is highly critical of the industry’s use of expert evidence it commissioned to back its case and its failure to disclose any internal assessments on how packaging design works for children and young people what the effect on standardized packaging on sales is likely to be. The judgment also notes that the great mass of the expert evidence put to the court by the tobacco industry was neither peer reviewed nor published in an appropriate scientific of technical journal.

At present two thirds of current smokers started when they were children and research shows that dull standardized packs are less attractive to young people. The tobacco industry is now considering whether or not to appeal.

Source of Information: Action on Smoking & Health ASH – UK

– Asian Tribune –

Law would ban e-cigarettes from workplaces in Hungary

The Hungarian government is planning legislation to restrict the usage of electronic cigarettes, banning them from workplaces and playgrounds, Hungary’s Cabinet Chief János Lázár said today, according to reports.

The regulation could come into effect as early as May 20, and further e-cigarette restrictions are being considered, the cabinet chief said.

The government is taking these steps following the European Court of Justiceʼs ruling in early May regarding a European Union directive on tobacco products. The EU directive mandates the standardization of packaging, a future EU-wide prohibition on menthol cigarettes and special rules for e-cigarettes, Hungarian news agency MTI noted.

The Hungarian government is also planning to introduce plain packaging for cigarettes, and flavored cigarettes will be banned, Lázár said. He added that it is possible the distribution and production of menthol, fruit or spice-flavored and capsule cigarettes will be banned as early as this year.

Lázár: Hungary eyes unified packaging for tobacco products, could ban menthol cigarettes

Following the European Court of Justice ruling on Wednesday that introducing standardized packages, prohibiting menthol cigarettes and applying special rules to e-cigarettes are all lawful practices, the Hungarian government will start drafting a bill on such measures next week, Hungary’s Cabinet Chief János Lázár said yesterday.

During his regular weekly press conference, the cabinet chief said that under the planned legislation, menthol cigarettes will be banned in Hungary, and tobacco products could be sold only in unified packages in the country. Lázár added that special rules will apply to electronic cigarettes as well.

The Hungarian government was first said to be planning such changes in June 2015. Professionals working in the tobacco industry have criticized the measures, claiming they will not reduce the consumption of tobacco products.

Philip Morris, Imperial Tobacco products likely to vanish

The tobacco products of retailers Philip Morris and Imperial Tobacco are expected to disappear from shelves soon as the two companyʼs did not agree with Hungary’s centralized tobacco distributor, which begins operations today, Hungarian online daily reported.

After a bill approved by Hungarian Parliament mid-December on the establishment of a centralized distribution company for tobacco products, the concession was reported to have been awarded to British American Tobacco (BAT) and Hungary’s Tabán Trafik. The two companies will act together as middlemen between manufacturers and retailers for the next few years.

Imperial Tobacco Magyarország Kft., JTI Hungary Zrt. and Philip Morris Magyarország Kft. have said the concession was not awarded fairly. They said in a press release in mid-June that they were jointly offering a concession of HUF 6 bln to operate a competition-free tobacco product distribution system that would create 500 jobs, while BAT and Tabán are expected to pay HUF 600 mln to the state for the concession.

According to, the products are expected to disappear from store shelves temporarily, as Philip Morris and Imperial Tobacco are hoping that the European Commission will declare Hungaryʼs centralized tobacco distribution system unlawful, thereby cancelling the new system, and restoring the old one.

However, the Ministry of National Development rejected their unsolicited tender application for the concession of a centralized tobacco distribution system, saying the tender did “not complying with legal requirements”, according to the ministry. “The bid is based on proper calculations, it is deliberate and economically substantial. We still stand by this offer expecting that the Ministry reconsiders it”, the three companies said, adding that they were open to negotiations.

Lajos Csizmadia, the spokesperson of the tobacco workers union (DDTSZ) told the Budapest Business Journal earlier that the new system is likely to cause the dismissal of 1,200 Hungarians who work in the industry.

Plain Packaging – International Overview

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