Philip Morris threatens Australia with court for new requirements to cigarettes packs design

July 11, 2011

In Australia a scandal is boiling up round the government plans to introduce new rules of cigarette packs execution on which will not appear brand names. Philip Morris that is afraid of loss of the competitive edge in this regard is ready to go to court and ask for compensation. The question can be about billiards of dollars.

On June 27th Philip Morris Asia Company registered in Hong Kong (owns Australian Philip Morris Limited) has declared that it has informed Australian government about their intention to file a suit if new rules of cigarette packs execution will be introduced. Authorities plan to bind tobacco Companies manufacturing cigarettes in plain monotone packs with no logo. "Compulsory removal of trade marks and other valuable compulsory intellectual property is violation of bilateral agreement about investments between Australia and Hong Kong" - is said in official statement of Philip Morris. In the Company underline that they have every reason to turn to the court where they will claim compensation for business impairment. As Philip Morris representative has noted the question can be about billions of dollars, though final decision will take court. However, according to Australian legislation, parties have three months to reach a compromise.

Australia can become first country in the world that has bind tobacco Companies to produce cigarettes in plain packs. Authorities have already decided that they will have olive color. According to research namely this color, smokers consider less attractive. And slogans, advertising texts and logos will be prohibited. Manufacturers will be able to indicate only name of cigarettes but only with standard font and color. Pictures that show consequences of smoking will take 76 % of the pack in front and 90 % - at back side. It is assumed that new rules will come into force in January 2012.

Authorities don't intend to abandon their plans in any way, even under the threat of court proceedings. "Tactics of big tobacco Companies will not daunt us, whether it is political or juridical", - prime minister of the country Julia Gillard has declared as an answer on Philip Morris threats. In Australia is already prohibited to advertise cigarettes in mass media and on streets. Besides, last year authorities have raised taxes on tobacco by 25 %.

About their intention to file a suit on Australian authorities have informed also British American Tobacco (BAT). By the way, in December 2010 Victoria State Supreme Court has delivered provisional decision in favor of BAT, allowing Britain Company to file suits in Australian courts on its' distributor in the country - Trojan Trading Company. BAT accuses Trojan Trading of fact that it has infringed the rights on it's trade mark, selling cigarettes Captain Black with warning pictures.