Tobacco Giants Sue Britain Over Rules on Plain Packaging

PARIS Big Tobacco is pushing back against Europes effort to remove the marketing allure from smoking.

On Friday, Philip Morris International and British American Tobacco, two of the worlds biggest tobacco companies, sued the British government over new rules, starting next May, that would require cigarettes to be sold in plain packages.

Britain would be the first of the European Unions 28 countries to impose the regulation, which formed part of a broad new set of tobacco rules, also governing electronic cigarettes, that the union approved last year but has left up to member states to enact. Ireland and France are among others planning to follow suit.

The tobacco industry has expressed alarm over a growing international move toward laws mandating that colorfully branded cigarette boxes be replaced with drab, uniform packages displaying prominent health warnings, including pictures of diseased human tissues. The industry has responded with costly lawsuits and threats to invoke trade treaties, particularly in less developed countries.

On Friday, the fight moved to Europe as a suit was filed in the High Court of Justice, one of Britains highest courts.

Philip Morris International, which is based in New York, said the regulations should be overturned on the grounds that they unlawfully deprive P.M.I. of its trademarks, in violation of both English and European Union law. British American Tobacco, based in London, said the British government had left it with no other choice.

Any business that has property taken away from it by the state would inevitably want to challenge and seek compensation, British American Tobacco said in a statement.

Philip Morriss leading brand is Marlboro. British Americans brands include Dunhill, Lucky Strike and Kool.

Japan Tobacco International, whose brands include Camel and Winston, also expects to challenge the legislation, the company said on Friday, referring to the British rules.

The companies are also seeking unspecified damages, which, if granted, could total in the billions of dollars.

The English Department of Health said in a statement that it would not allow public health policy to be held to ransom by the tobacco industry, adding: We would not have gone ahead with standardized packaging unless we had considered it to be defensible in the courts.

In the United States, tobacco companies sued the Food and Drug Administration to block an order that would have required cigarette packages to carry large, graphic warnings illustrating the dangers of smoking. An appeals court ruled that the labels would violate the First Amendments free speech protections, and the agency abandoned the plan in 2013.

Britain has taken a relatively tough line on tobacco. A pack of cigarettes typically sells for around 8 pounds, or about $12.50, and taxes make up more than three-quarters of that, according to the Tobacco Manufacturers Association. That compares with an average United States selling price of $5.51 a pack (the price varies greatly by state). Since April, British law has required that tobacco products be kept out of sight at retail shops.

Anti-tobacco activists noted that the highly profitable industry, with its legions of lawyers, had often resorted to legal tactics to delay legislation and intimidate opponents.

They would do that, wouldnt they? Deborah Arnott, chief executive of Action on Smoking and Health, a nonprofit public health advocacy group in London, said of the lawsuits. They always challenge everything.

Ms. Arnott said she was confident that the British law would withstand any challenge, but that that was not really the point.

Theyre pulling this out now, like they did in Australia, just to try to discourage other governments from going ahead, she said.

In 2012, Australia became the first developed nation to order the use of plain packaging, making itself the target of numerous industry challenges, all of which failed in the national courts. Philip Morris has responded by suing Australia in Hong Kong, invoking the investor-state dispute settlement clause of a trade treaty.

Australia is also facing challenges at the World Trade Organization brought by Cuba, Ukraine, Honduras and the Dominican Republic. Those countries claim the plain-packaging law acts as a so-called technical barrier to trade and violates their intellectual property rights.

Philip Morris International was spun off from the Altria Group in 2008 to sell products like Marlboro cigarettes outside the United States. It operates independently of Altria, which still owns Philip Morris USA.

Philip Morris International reported an annual profit of $7.5 billion for 2014, on revenue of $29.8 billion. British American Tobacco had 3.1 billion profit on nearly 14 billion of revenue.

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