Australia Wins Landmark WTO Ruling on Plain Tobacco Packaging

GENEVA, Switzerland—Australia triumphed on Thursday in a major trade dispute over its pioneering “plain” tobacco packaging law, with World Trade Organisation judges rejecting a complaint brought by Cuba, Indonesia, Honduras and Dominican Republic.

The WTO panel said Australia’s law improved public health by reducing the use of tobacco products, rebuffing claims that alternative measures would be equally effective. It also rejected the argument that Australia had unjustifiably infringed tobacco trademarks and violated intellectual property rights.

Australia’s law, introduced in 2010, bans logos and distinctively-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.

The challenge to it was seen as a test case for public health legislation globally, and could lead to tighter marketing rules for unhealthy foods and alcohol as well as tobacco.

Honduras indicated that it was likely to appeal, saying in a statement that the ruling contained legal and factual errors and appeared not to be even-handed, objective or respectful of the complainants’ rights.

“It appears that this dispute will require the review of the Panel’s findings by the WTO Appellate Body before any final conclusions can be drawn,” it said.

An Indonesian trade official said Indonesia would examine its options. Cuban and Dominican trade officials were not immediately available for comment.

The World Health Organisation welcomed the WTO ruling, saying it cleared “another legal hurdle thrown up in the tobacco industry’s efforts to block tobacco control and is likely to accelerate implementation of plain packaging around the globe.”

It said six other countries had brought in plain packaging laws - Hungary, Ireland, France, New Zealand, Norway and Britain - while another six had passed laws yet to be implemented -Burkina Faso, Canada, Georgia, Romania, Slovenia and Thailand.

“A number of other countries are examining the policy,” the WHO added.

Vera Luiza da Costa e Silva, head of the secretariat of the WHO’s Framework Convention on Tobacco Control, said there was already a “domino effect”, with countries moving towards Australian-style rules and seeing them as a way towards the “endgame” with less than 5 percent of the population smoking.

Geir Ulle, International Trade Director at Japan Tobacco International, said the decision was a major step backwards for the protection of intellectual property rights internationally.

“It sets a dangerous precedent that could encourage governments to ban branding on other products without providing any reliable evidence of benefits to public health,” Ulle said, adding that recent data showed plain packaging was not working.

“This ruling doesn’t make the policy right or effective, nor does it make it worth copying.”