BAT continues to mull legal challenge to plain cigarette packaging

British American Tobacco is still considering a legal challenge to standardised cigarette packaging after legislation restricting the use of branding on cigarette packets was passed last night.

The Smoke-free Environments (Tobacco Standardised Packaging) Amendment Bill passed its third reading in Parliament yesterday by 108 to 13, with opposition from New Zealand First and the Act Party. It allows a plain packaging regime for tobacco products, meaning the government can ban any branding on a cigarette packet, as well as prescribe the colour, shape and size of the box - the legislation gives "a consistent drab brown colour with a matt finish" on all sides as an example.

Australia introduced plain packaging in December 2012, and the first bill to the same effect was introduced in New Zealand in 2013, though this was stalled due to concerns over legal challenges in Australia.

Saul Derber, head of legal and external affairs at British American Tobacco, said today that the company "continues to reserve its position" on whether it will initiate a legal challenge to the legislation, but will comply with the plain packaging requirements.

In May, when the government announced the consultation on draft regulations under the bill, the company said it would await details of the regulations to be released before exploring any legal options available to defend its intellectual property.

"Not only is the Australian tobacco plain packaging experiment failing to meet its objectives, the policy is having serious unintended consequences," Derber said in a statement. "The tobacco black market has grown by over 20 percent in Australia since the introduction of plain packs, costing the Australian Government about NZ$1.5 billion in lost revenue in 2015.

"Given that New Zealand, unlike Australia, has an unlicensed personal tobacco growing allowance and lower penalties for trade in black market tobacco, we expect the black market here to grow as well. It is naive to imagine that introducing plain packaging in New Zealand will not increase the black market and erode government revenue whilst having no impact on total tobacco consumption. Black market tobacco has no graphic health warnings, no controls preventing sales to youth and pays no taxes. This can only grow with excise hikes over the next four years."

Derber also said that plain packaging was "an attack on companies' intellectual property rights" and similar restrictions could be made on fast food or alcohol packaging.

(BusinessDesk)

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