Monday, November 21, 2011

Philip Morris to Sue Australian Government for New Law Requiring Plain Packaging

Global tobacco firm Philip Morris said it is suing the Australian government after Parliament passed a new law requiring all cigarettes to be sold in plain packages. Under the controversial new law, all tobacco products sold in Australia must be in plain packaging from December 1, 2012. The law demands all cigarettes be sold in drab olive-brown packets with large, graphic health warnings.

The government hailed the passage of the law as "one of the most momentous public health measures in Australia's history" and called on the big tobacco companies to accept the will of the Parliament.

COMMENT: Unfortunately, Philip Morris Asia (PMA) contends that the Australian government is unable to demonstrate that the new law will be effective in reducing smoking and has ignored the widespread concerns raised in Australia and abroad regarding the serious legal issues associated with plain packaging.

Hong Kong-based PMA said it is seeking to suspend the legislation and seek substantial compensation for the loss of the company's valuable trademarks and investments in Australia under a bilateral investment treaty with Hong Kong. The company expects damages to amount to billions of dollars and that the legal process will take two to three years.

The company will also argue it is unconstitutional for the government to remove its trademarks and other intellectual property without compensation.

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