Australia wins landmark WTO tobacco packaging case

4 May 2017:

A landmark Australian law on restrictive tobacco packaging has been upheld at the World Trade Organization after a five-year legal battle, Bloomberg news reported on Thursday, citing two people familiar with the situation.

Such a ruling from the WTO has been widely anticipated as giving a green light for other countries to roll out similar laws, not only on tobacco but also on alcohol and unhealthy foods.

The Australian law goes much further than advertising bans and graphic health warnings enforced in many other countries.

The rules, introduced in 2010, ban flashy logos and distinctive-coloured cigarette packaging in favour of drab olive packets that look more like military or prison issue, with brand names printed in small standardised fonts.

Tobacco firms said their trademarks were being infringed, and Cuba, Honduras, Dominican Republic and Indonesia complained at the WTO that the rules constituted an illegal barrier to trade.

Although the WTO’s final ruling is not expected until July, a confidential draft said Australia’s laws were a legitimate public health measure, Bloomberg reported.

Spokespeople for the WTO were not immediately available for comment.

A spokeswoman for British American Tobacco declined to comment on the ruling until it was publicly released, but suggested the complainants would keep fighting.

“As there is a high likelihood of an appeal by some or all of the parties, it’s important to note that this panel report is not the final word on whether plain packaging is consistent with international law,” she said.

A spokeswoman for Japan Tobacco International also declined to comment on the ruling, but the fact that the draft had been leaked was disconcerting and a breach of WTO rules.

“Such breaches completely undermine the integrity of the process, which has not yet run its full course,” she said.

Some trade experts said they expected the arguments on trademarks to go Australia’s way, but the complainants were battling to discredit the data used by Australia to support its case.

Australia had the backing of the World Health Organization, and many other countries began announcing similar legislation, a sign that they expected the WTO to rule in Australia’s favour.

The plodding pace of WTO decision-making prompted Australia to complain that its challengers were deliberately stalling the proceedings, producing a “regulatory chilling” effect on other countries wishing to follow its example.

Britain, France and Hungary went ahead with their own legislation, while Ireland, Canada, and South Africa are considering following suit.

(Reporting by Tom Miles and Martinne Geller; editing by John Stonestreet)