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December 2nd, 2011:

Tougher penalties to curb tobacco smuggling


Contractors dumping cartons of contraband cigarettes seized by Singapore Customs into a refuse truck before taking them for incineration. — ST PHOTO: ALPHONSUS CHERN

By Tessa Wong

Tobacco and cigarette smugglers now face stiffer penalties, including mandatory jail time and increased fines.

These were among several changes made in Parliament on Tuesday to laws on Customs, goods and services tax (GST), and stamp duty.

Minister of State for Finance Josephine Teo explained the need to increase Customs enforcement.

She noted that from 2005 to last year, the number of tobacco-related Customs offences went up by 24 per cent. These offences range from smuggling and buying to selling and possessing cigarettes and tobacco products which have not had their duties paid.

Tobacco sponsorship of sports could doom Japan’s Olympic bid

Opposition includes U.N., activists and doctors

Japan Tobacco's ties to professional volleyball teams and the ongoing World Cup tournament for women have prompted local and international opposition and a call to stop the association. (Christopher Johnson/Special to The Washington Times)

Japan Tobacco’s ties to professional volleyball teams and the ongoing World Cup tournament for women have prompted local and international opposition and a call to stop the association. (Christopher Johnson/Special to The Washington Times)


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TOKYO —Japan risks losing its bid to host the 2020 Olympic Games because of growing local and international opposition to the national tobacco corporation’s sponsorship of World Cup volleyball, which attracts millions of women and schoolgirls.

Australia Bans Distinctive Cigarette Packaging — Should Others Follow?,8599,2100987,00.html?iid=ent-main-mostpop2

An artist’s impression of what cigarette packaging will look like under a new Australian law, due to be implemented by December 2012

A year from now, Australian smokers will have to look a whole lot harder to find their favorite brand of smokes. Thanks to a first-of-its-kind law to be implemented by December 2012, when they glance across the counter they’ll be staring at rows of nearly identical, olive green cartons. In place of symbols or slogans, there will be graphic health warnings covering much of each pack.

On Nov. 21, Australia announced that it will be the first country in the world to introduce plain cigarette packaging. It’s a controversial move that will be closely watched by countries like Canada, New Zealand and the U.K., all of which are considering similar legislation. Australia already has some of the strictest antismoking laws in the world. Smoking is banned in enclosed public spaces as well as many outdoor areas with laws varying from state to state. Tobacco companies cannot sponsor events in Australia, and cigarettes can only be sold behind closed doors. Still, some 15,000 people die from smoking related illness every year and 15% of Australians smoke. The government wants to reduce that figure to 10% by 2018. (See photos of vintage cigarette-smoking ads.)

Health campaigners welcomed the decision. “This has been a really important campaign for us,” says Ian Olver, the CEO of Cancer Council Australia. “It was one of the last opportunities that the tobacco companies have had to advertise their product.” Olver believes the new rules will make smoking less alluring. “Young people get attracted to cigarette packets because of the way they represent their lifestyles. A sportier person might buy what they consider a sportier brand, and every time they take that packet out, they advertise that brand to their peers.”

Unsurprisingly, the tobacco industry isn’t pleased. Philip Morris, whose brands include Longbeach, Peter Jackson and Marlboro, took action three hours after the legislation passed. Philip Morris Asia Ltd. (PMA), owners of the Australian affiliate Philip Morris Ltd. (PML), served a notice of arbitration on the Australian government. “The Government has passed this legislation despite being unable to demonstrate that it will be effective at reducing smoking and has ignored the widespread concerns raised in Australia and internationally regarding the serious legal issues associated with plain packaging,” said Anne Edwards, a PMA spokesperson, in a statement. “Plain packaging turns tobacco products into a commodity, robbing PML of its ability to differentiate its products from competitor brands, and thereby substantially diminishing the value of PMA’s investments in Australia.”

British American Tobacco Australia (BATA) announced on Nov. 10 that they will take domestic legal action as soon as plain packaging passes into law. “BATA believes it is unconstitutional for the Federal Government to remove a legal company’s valuable property without compensation and feels the High Court will agree,” said the company’s statement.

The government, though, seems confident about the new law, noting that they received “comprehensive” legal advice on the matter. Lawyers agree. Even though it’s unconstitutional for the government to acquire property (including intellectual property) without compensation, the government will not actually be taking the trademarks away from cigarette companies. “The government doesn’t get to use tobacco trademarks for itself. If it did, it would have to pay,” said Simon Evans, a professor of constitutional law at the University of Melbourne, on the Conversation, an academic website. (See how one cigarette can raise the risk of cancer and heart disease.)

Marketing experts believe the damage to cigarette brands could be significant. “It will take away any relationship that the consumer has with the brand,” says Andrew Hughes, a lecturer at the School of Management, Marketing and International Business at the Australian National University in Canberra. “The consumer won’t understand why they would pay more for one type of cigarette and not another. [Tobacco companies] will not go to the effort of making premium products as there’s no incentive.”

Craig Seitam, a marketing expert who used to work at Rothmans of Pall Mall from 1994 to ’98, says that there is not much difference between cigarettes apart from the packaging. “People buy certain brands to project a certain image,” he says. “If they have a packet of Dunhill, they might be communicating to others that they see themselves as sophisticated, another brand might say something else, but all that will soon go.” But regardless of the change, those who are already addicted are unlikely to quit. “As a social group, smokers have a strong bond,” says Hughes, the lecturer. “Because others are smoking, it reinforces your behavior, especially during an office break or outside a bar. That’s one thing the government can not do a lot about.”

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The Associated Press Tobacco company sues Australia over packaging law.htm

Tobacco company sues Australia over packaging law

By KRISTEN GELINEAU, Associated Press – 1 day ago

SYDNEY (AP) — British American Tobacco launched legal action against the Australian government on Thursday, challenging the country’s tough new law that ban logos from cigarette packs.

The move comes less than two weeks after Australia’s Parliament passed the legislation, which forces tobacco companies to remove their distinctive colors and logos and instead print their brand names in a tiny font on drab, olive-green packs. The packs will also feature graphic images highlighting the negative effects of smoking, such as cancer-riddled mouths.

Australia is the first country in the world to pass such a strict packaging law, which is meant to strip away any lingering glamour associated with smoking.

The legislation, which takes effect on Dec. 1, 2012, sparked immediate outrage from tobacco companies. Hong Kong-based Philip Morris Asia has also filed legal action against the government, and other cigarette makers have threatened to do the same.

British American Tobacco, the Australian market leader, filed its lawsuit in the nation’s High Court on Thursday, arguing that the legislation is unconstitutional and violates intellectual property rights.

“As a legal company selling a legal product we have consistently said we will defend our valuable intellectual property on behalf of our shareholders as any other company would,” company spokesman Scott McIntyre said in a statement. “If the same type of legislation was introduced for a beer brewing company or a fast food chain, then they’d be taking the government to court and we’re no different.”

Health Minister Nicola Roxon has vowed to fight the tobacco companies in court.

“Let there be no mistake, big tobacco is fighting against the government for one very simple reason — because it knows, as we do, that plain packaging will work,” Roxon said in a statement. “While it is fighting to protect its profits, we are fighting to protect lives.”

Tobacco companies are already banned from advertising on Australian billboards and in the country’s magazines, and smoking in many public places is restricted.

Copyright © 2011 The Associated Press. All rights reserved.

Related articles

US99 million award against PM

Oregon Supreme Court orders $99 million award against Philip Morris

Published: Friday, December 02, 2011, 6:18 PM     Updated: Friday, December 02, 2011, 6:28 PM

By Aimee Green, The Oregonian The Oregonian

The Oregon Supreme Court said Friday that Philip Morris USA must pay an additional $99 million, on top of the millions it has already paid after a 1999 jury penalized the tobacco maker for causing the death of a Portland smoker.

The ruling could represent the end to a 14-year fight over damages in the death of retired Portland school custodian Jesse D. Williams. He smoked as many as three packs of Marlboros a day and died of lung cancer in 1997 at age 67.

In 2009, the U.S. Supreme Court shot down Philip Morris’ appeal that the award of $79.5 million in punitive damages was unjust. The cigarette maker paid Jesse Williams’ widow, Mayola, economic and noneconomic damages — plus 40 percent of that punitive award, and 9 percent interest, as required by state law. That amounted to US$61 million.

But Philip Morris continued to dig in its heels when it came to paying the state the remaining 60 percent of the punitive damages award, plus interest. Today, that amounts to US$99 million.

The state was worried it would never collect on the US$99 million. So the state and Mayola Williams agreed to split any award, 55 percent to the state and 45 percent to Williams. If the state lost, the court could have awarded all $99 million to Williams.

If Friday’s ruling stands, Williams will get an additional US$45 million from Philip Morris. The state will get almost US$55 million.


The Oregonian’s continuing coverage of the case of the estate of Jesse Williams vs. R.J. Reynolds.

In arguments before the court in September, Philip Morris contended that the state of Oregon had already signed off on its right to the money because in 1998 – one year before the jury’s verdict – then-state Attorney General Hardy Myers had agreed not to pursue any more claims for injuries from tobacco exposure. The clause was part of a settlement brokered with Philip Morris, other tobacco companies and 46 states for the billions of dollars the states had paid and would continue to pay for health care for ailing, low-income smokers.

Under that deal, the tobacco companies agreed to pay Oregon $2.1 billion during the first 25 years and then about $81 million a year in perpetuity.

But attorneys for the state of Oregon and Mayola Williams argued the state was simply trying to collect on the 60 percent due to it under the state’s punitive-damages law. The type of case it was — in other words if it dealt with tobacco or something else — didn’t matter, said the attorneys for the state and Williams.

On Friday, the Oregon Supreme Court agreed.

“We’re happy with the result,” said Tony Green, spokesman for the Oregon Department of Justice. He declined to comment further because he’s not sure the case is really over.

Jim Coon, one of the Portland attorneys representing Williams, said it is possible that attorneys for Philip Morris could continue to fight, but their avenues to do so are severely limited.

“Will Philip Morris accept the judgment and actually pay what the jury said it needs to pay?” Coon said. “Or are they going to make up some other argument? They’ve got high-priced lawyers, the best that money can buy.”

Coon said Philip Morris could ask the Oregon Supreme Court to reconsider.

He says it’s unlikely that the U.S. Supreme Court would consider the issue because it deals with a state law, the Oregon punitive-damages statute.

Attorneys for the tobacco maker didn’t return a call seeking comment Friday. A Philip Morris spokesman emailed a news release. He said he couldn’t answer questions, including whether the company would appeal.

“We believe that the Oregon Supreme Court misapplied the law and reached an erroneous result,” Murray Garnick is quoted as saying in the news release. Garnick is client services senior vice president for Philip Morris USA’s parent company, Altria Group.

At the time of the 1999 award, it was the largest punitive damages award against a tobacco company in the United States.

The state’s $55 million would go into the Oregon crime victims’ compensation fund, which pays for everything from medical bills to funerals for victims of violent crime. The money, however, would likely flood the fund with more than it needs to meet current demand. State lawmakers, however, have the power to reallocate the money — and that’s likely given state’s budget shortfalls in schools, police, prisons and other programs.