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Tobacco Firms Challenge Plain Packaging Rules

Tobacco Firms Challenge Plain Packaging Rules

17/12/15

In May 2014 the new Tobacco Products Directive (2014/40EU) entered into force, replacing Directive 2001/37/EC).  The new Directive includes rules on packaging, in particular a requirement for health warnings to cover 65% of the front and the back of tobacco packaging.

Last March, the UK Parliament approved the Standardised Packaging of Tobacco Products Regulations, which will enter into force in May 2016 and goes beyond the requirements of the Directive, introducing plain packaging rules for tobacco products.  Under the new rules, the parts which are not covered by health warnings must be dark brown and brand names must all be written in a standardised character with no distinctive features.

These requirements, as expected, have encountered fierce opposition from certain tobacco companies, which have disputed the introduction of plain packaging requirements on the basis that it would illegitimately expropriate their intellectual property rights (amongst other grounds).  Four companies have now begun a legal challenge to the packaging requirement, requesting compensation which would amount to approximately £11 billion, according to industry analysts.

In Australia, where plain packaging law entered into force in 2012, a similar attempt was made by tobacco companies and failed. The Australian High Court declared that plain packaging rules did not represent acquisition of property.

The main purpose of the action in Australia was to delay as much as possible the introduction of the plain packaging law and it is likely that tobacco companies are adopting the same strategy in the UK.