The Australian Financial Review | 18 December 2015

Philip Morris loses case against Australia’s tobacco plain packaging law

by Joanna Mather

Cigarette company Philip Morris has suffered another defeat in its long-running bid to overturn Australia’s plain packaging laws.

An arbitration tribunal based in Singapore has issued a unanimous decision agreeing with Australia’s position that it has no jurisdiction to hear Philip Morris’s claim.

The Public Health Association of Australia described the result as the "best Christmas present for public health".

Philip Morris challenged Australia’s plain-packaging laws when they came into force in 2011.The laws ban the use of trademarks on cigarette packs.

The company argued the laws amounted to a "sweeping ban on trademarks" and breached Australia’s 1993 Investment Promotion and Protection Agreement with Hong Kong.

"There is nothing in today’s outcome that addresses, let alone validates, plain packaging in Australia or anywhere else," Philip Morris international senior vice president and general counsel Marc Firestone said in a statement on Friday.

"It is regrettable that the outcome hinged entirely on a procedural issue that Australia chose to advocate instead of confronting head on the merits of whether plain packaging is legal or even works".

Fairfax Media reported in July that the case had cost the government $50 million.

The public health associations’ tobacco spokesperson, Mike Daube, who chaired the federal government’s expert committee recommending plain packaging, said cigarette companies were desperate to remove plain packaging because it had proved effective in cutting smoking rates.

Association chief executive Michael Moore agreed fewer adults and children were smoking because of the graphic warnings.

"This is the best Christmas present for public health nationally and internationally," he said.

But Phillip Morris said governments should be held accountable for using unlawful means to control tobacco.

Philip Morris said it could appeal the decision and four countries are considering a challenge to plain packaging laws in the World Trade Organisation. But in the meantime a growing number of countries, including France this week, are moving to enact legislation similar to Australia’s.