Australia Edges Closer to World's Most Restrictive Tobacco Law

As Australia moves to implement the most restrictive tobacco regulations in the world, Both Philip Morris and BAT have warned that they could pursue legal action against the Australian government.

July 11, 2011

SYDNEY - The Wall Street Journal wrote last week that the Australian government introduced into Parliament new laws that seek to ban advertisements on packs of cigarettes, "setting up a legal battle against the world??s biggest tobacco companies."

"This world first initiative sends a clear message that the glamour is gone from smoking," Health Minister Nicola Roxon said in a statement, adding, "Once enacted, these plain packaging laws will be the world??s toughest laws on tobacco promotion."

Under the proposed laws, tobacco manufacturers would no longer be able to display their own branding on packs of cigarettes, including logos, colors and promotional text on packs of cigarettes. The new laws would begin in January 2012. Product names would have to appear on packs in standard colors and positions in a regular font and size, and colored a dark olive-brown, which Australian government research suggests as having the lowest appeal to smokers.

Health warnings with gruesome images would make up 75% of the front of the packaging and 90% of the back.

"Rather than being a marketing tool, the pack will only serve as a stark reminder of the devastating health effects of smoking," Roxon added.

Philip Morris International Inc. warned Australia's government in June that it will challenge the decision in the courts and will seek billions of dollars in financial compensation. British American Tobacco PLC has also warned it could pursue legal action, while Imperial Tobacco Group PLC is also opposed to the measures.

The Washington Post adds that penalties would apply from July 1, 2012, to retailers who fail to comply with the new laws, accompanied by fines of up to $1.1 million ($1.2 million U.S.) for a company and $220,000 for an individual. Australia already bans point-of-sale tobacco advertising and displays.

The legislation is expected to become law without major opposition, although no timeframe has been set for when Parliament will vote on the measures.

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