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October 6th, 2011:

Australia seeks world backing on tobacco legal fight

CANBERRA | Thu Oct 6, 2011 10:14am EDT

CANBERRA (Reuters) – Australia is confident the world’s toughest anti-tobacco laws will soon pass parliament, but the government warned on Thursday that the anti-smoking fight was not over and urged other nations to reject a possible WTO challenge backed by big tobacco.

Health Minister Nicola Roxon said the minority government was bracing not only for a court challenge to its plan to force cigarettes to be sold in plain packaging from 2012, but also an intellectual property dispute at the World Trade Organization.

“A tobacco company themselves can’t bring a claim in the WTO. A state has to do that,” Roxon told Reuters in an interview.

“I won’t be surprised if tobacco companies are out there looking for a country to claim on their behalf, and we urge countries not to do that.”

The new laws, expected to easily pass parliament next week with backing from the conservative opposition and Green crossbench senators, are being closely watched by New Zealand, Canada, the European Union and Britain, which are considering similar restrictions.

The legislation is in two parts, one of which mandates that cigarettes can only be sold in plain olive green packaging and another part restricting tobacco company trademarks.

The pathfinding plan has infuriated tobacco firms including Philip Morris, British American Tobacco and Imperial Tobacco, which have threatened a High Court challenge. Tobacco nations like Nicaragua, Kenya and Ukraine also say the measures breach global trade rules.

Despite political unease at home over potential compensation claims that tobacco companies have said could mount to billions of dollars, Roxon has been a passionate advocate for the laws within the Labor government, which has a one-seat buffer with the backing of Green and independent MPs.

Her father, Jack, a one-time smoker, died of esophageal cancer at 42, when Roxon was just 10, leaving her pharmacist mother alone to raise three daughters.

“Big tobacco companies do have big tentacles that reach far and wide across the world. I’ve made very clear to my international colleagues that they need to look at this not only from a health perspective, but from a trade perspective,” Roxon, now 44, said.

Australia says the new laws reflect its obligations under the World Health Organization’s 2005 framework against tobacco, which urges states to consider plain packaging laws. The WHO estimates more than 1 billion around the world are regular smokers, with 80 percent in low and middle income countries.

Industry analysts say tobacco companies are worried that plain packaging could spread to emerging markets like Brazil, Russia and Indonesia, and threaten growth there.

In Britain, tobacco companies have been fighting in courts for the right to sell cigarettes in vending machines, while tobacco companies in the U.S. are challenging more graphic health warnings on cigarette packets, claiming the changes violate their right of free speech.

An Australia parliamentary committee looking into the legislation and possible grounds for a legal contest received submissions from as far afield as Europe and Kenya, and even cigarette retailers in Peru and Rio de Janeiro.

“We don’t know how much (tobacco firms) seek to influence other players, but we certainly become suspicious when you see comments made by people apparently completely disconnected to Australia … when the lines are exactly reflecting — almost parroting — tobacco companies,” Roxon said.

Australia’s tobacco market generated total revenues of around A$10 billion (U.S.$9.6 billion) in 2009, up from A$8.3 billion in 2008, although smoking generally has been in decline. Around 22 billion cigarettes are sold in the country each year.

Australia wants to cut the number of people who smoke from around 15 percent of the population to 10 percent by 2018. Health authorities say smoking kills 15,000 Australians each year with social and health costs of around A$32 billion.

Roxon said she had experienced enormous support from other health ministers at a recent United Nations health meeting in New York, and was sharing Australia’s legal preparations with other nations likely to follow Canberra’s plain-pack lead.

“Ultimately that’s going to be worrying the tobacco companies, but that is absolutely going to be better for consumers and people who would otherwise be future patients,” she said.