Tobacco firm to sue over Aussie packaging plans
TOBACCO giant Philip Morris is threatening to sue the Australian government for possibly billions of dollars over its plan to be the first country to introduce plain, brand-less packaging for cigarettes.
The tobacco firm is fearful that plain packaging will damage its cigarette brands like Marlboro and Alpine and reduce their ability to compete against other brands.
The Australian government argues that reducing brand identification will make smoking less attractive and reduce smoking rates and associated health costs, said by Australian health authorities to kill 15,000 people a year in the country.
The fight over cigarette packaging is being closely watched by other tobacco firms and governments, with New Zealand, Canada and the UK considering similar laws.
Analysts also say plain packaging would hit tobacco firms in emerging markets where they are seeking to lure smokers away from cheap brands to more expensive ones and, if widespread, could lead to takeovers in the industry to cut costs.
Philip Morris Asia said yesterday it had served a notice of legal claim on the government under Australia’s bilateral investment treaty with Hong Kong, which holds the government responsible to protect Hong Kong investments in Australia.
The notice sets a mandatory three-month period for the two sides to negotiate an outcome. If there is no agreement, Philip Morris Asia said it would seek compensation.
“Failing that, we aim to go ahead with a compensation claim for the loss to our business in Australia that would result from plain packaging,” said Philip Morris Asia spokeswoman, Anne Edwards.