BMJ 2015;350:h2865 doi: 10.1136/bmj.h2865 (Published 28 May 2015)
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News
NEWS Four tobacco companies plan action against UK government over standard packaging Clare Dyer The BMJ
Tobacco companies have launched a multi-billion pound legal claim against the UK government for losses as a result of a law that will require them to sell their cigarettes in plain packaging.
The companies claim that forcing them to use unbranded packages amounts to deprivation of highly valuable intellectual property. They say that the law, which is expected to come into force in May 2016, amounts to illegal seizure of their trademarks by the state.
Philip Morris International and British American Tobacco have filed papers at the High Court in London, and Imperial Tobacco and Japan Tobacco International have signalled that they intend to follow suit. Philip Morris argues that the new regulations violate a core doctrine of English and European Union law, that there must be fair compensation for deprivation of property. The company also contends that the rules obstruct the free movement of goods and breach EU law, which states that European Community trademarks can be used by identical means throughout the EU. “We respect the government’s authority to regulate in the public interest, but wiping out trademarks simply goes too far,” said Marc Firestone, senior vice president and general counsel for Philip Morris International. “Countries around the world have shown that effective tobacco control can co-exist with respect for consumer freedoms and private property.”
The company said that the government should have held back from issuing the regulations until the European Court of Justice had decided, in a case currently before it, whether standardised packaging is permissible under the EU’s recently enacted tobacco product directive.
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A Department of Health spokesperson said, “We will not allow public health policy to be held to ransom by the tobacco industry. Smoking is the biggest preventable cause of death in England, killing 80 000 people every year. “We would not have gone ahead with standardised packaging unless we had considered it to be defensible in the courts.”
In a submission to the Department of Health last year Philip Morris said that it could seek “billions of pounds” in compensation if it was deprived of the right to use its brands. A 2014 Exane BNP Paribas note to investors in tobacco stocks concluded that “a figure in the billions could well be plausible.” Tobacco companies have already brought a legal challenge in Australia over its Tobacco Plain Packaging Act 2011. The High Court of Australia ruled in 2012 that Australia did not acquire any property as a result of the law, which therefore did not violate a provision of the country’s constitution requiring the acquisition of property to be on “just terms.” Companies are also threatening to sue the Irish state over plain packaging legislation in Ireland.
Penny Woods, chief executive of the British Lung Foundation, said, “The fact that the tobacco industry is suing our government over a public health measure that is trying to protect the health of our nation shows that it will stop at nothing to increase its profits.” She added, “These tactics have been tried before in Australia, where they failed. We do not expect it to be any different in this country and look forward to the introduction of the law in May 2016.” Cite this as: BMJ 2015;350:h2865 © BMJ Publishing Group Ltd 2015
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Page 1 of 1
News
NEWS Four tobacco companies plan action against UK government over standard packaging Clare Dyer The BMJ
Tobacco companies have launched a multi-billion pound legal claim against the UK government for losses as a result of a law that will require them to sell their cigarettes in plain packaging.
The companies claim that forcing them to use unbranded packages amounts to deprivation of highly valuable intellectual property. They say that the law, which is expected to come into force in May 2016, amounts to illegal seizure of their trademarks by the state.
Philip Morris International and British American Tobacco have filed papers at the High Court in London, and Imperial Tobacco and Japan Tobacco International have signalled that they intend to follow suit. Philip Morris argues that the new regulations violate a core doctrine of English and European Union law, that there must be fair compensation for deprivation of property. The company also contends that the rules obstruct the free movement of goods and breach EU law, which states that European Community trademarks can be used by identical means throughout the EU. “We respect the government’s authority to regulate in the public interest, but wiping out trademarks simply goes too far,” said Marc Firestone, senior vice president and general counsel for Philip Morris International. “Countries around the world have shown that effective tobacco control can co-exist with respect for consumer freedoms and private property.”
The company said that the government should have held back from issuing the regulations until the European Court of Justice had decided, in a case currently before it, whether standardised packaging is permissible under the EU’s recently enacted tobacco product directive.
For personal use only: See rights and reprints http://www.bmj.com/permissions
A Department of Health spokesperson said, “We will not allow public health policy to be held to ransom by the tobacco industry. Smoking is the biggest preventable cause of death in England, killing 80 000 people every year. “We would not have gone ahead with standardised packaging unless we had considered it to be defensible in the courts.”
In a submission to the Department of Health last year Philip Morris said that it could seek “billions of pounds” in compensation if it was deprived of the right to use its brands. A 2014 Exane BNP Paribas note to investors in tobacco stocks concluded that “a figure in the billions could well be plausible.” Tobacco companies have already brought a legal challenge in Australia over its Tobacco Plain Packaging Act 2011. The High Court of Australia ruled in 2012 that Australia did not acquire any property as a result of the law, which therefore did not violate a provision of the country’s constitution requiring the acquisition of property to be on “just terms.” Companies are also threatening to sue the Irish state over plain packaging legislation in Ireland.
Penny Woods, chief executive of the British Lung Foundation, said, “The fact that the tobacco industry is suing our government over a public health measure that is trying to protect the health of our nation shows that it will stop at nothing to increase its profits.” She added, “These tactics have been tried before in Australia, where they failed. We do not expect it to be any different in this country and look forward to the introduction of the law in May 2016.” Cite this as: BMJ 2015;350:h2865 © BMJ Publishing Group Ltd 2015
Subscribe: http://www.bmj.com/subscribe
