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Plain packaging for tobacco – the thin end of the wedge for the alcohol sector?

The Australian Tobacco Plain Packaging Act 2011 imposes significant restrictions upon the colour, shape and finish of retail packaging for tobacco products, and prohibits the use of trade marks other than to a limited extent.  Brand names must appear in a standard size, font and location.  Embellishments on cigarette packs and cartons are not allowed.  Packs and cartons must be rectangular, have only a matt finish, and bear on their surfaces the prescribed drab, dark brown colour (chosen after it was found to be the most unappealing of all colours).  Information and warnings about the use of tobacco products will take up much of any free space that may remain.

The tobacco companies challenged the validity of the Act, on the grounds that it was an acquisition by the Australian Commonwealth of their intellectual property rights and goodwill without fair compensation, and thus contrary to the Australian Constitution.

The High Court held* that although the Act might amount to a taking of property without compensation, there was no breach of the constitutional prohibition because it had to be shown that some other person acquired some interest in the relevant property.

Why does this matter to the alcohol sector?

Because there are health advocates in Australia who argue that the alcohol sector should be the next target for plain packaging regulation.  According to one Australian commentator, this decision against the tobacco companies sets a very awkward and difficult precedent for the alcohol sector if and when similar proposals are extended to it.  And although Australia was the first nation to introduce legislation of this kind, it is being actively considered in other parts of the world.

The UK Department of Health has recently conducted a consultation on plain (“standardised”) packaging for tobacco products, the results of which are awaited.  (Since the UK has no written constitution, it will be interesting to see how any alleged uncompensated deprivation of rights by the State will be dealt with if plain packaging is given the thumbs up.)  At EU level, and elsewhere in the world, support for tobacco plain packaging is also gaining ground.  It may not be alarmist to view its creeping advance as the thin end of the wedge for alcoholic drinks as well.

Might the fat lady yet sing?

Possibly.  It is understood that at least one country may apply to a WTO Panel to challenge the Australian legislation under the TRIPS Agreement.  But that might only serve to delay, rather than prevent, further movement in this direction.

*Case:  JT International SA v Commonwealth [2012] HCA 43