Recently Philip Morris became the third largest tobacco company to start a legal proceeding against new Australian laws that will compel smoking products to be sold in plain packaging from the following year.

The strict, world-first legislation, advised by parliament is being observed by governments planning to introduce similar actions in Europe, Canada and New Zealand. It has enraged the leading tobacco companies afraid that it may lead to a world precedent and violate trademark rights. In conformity with the law, cigarettes, cigars and other tobacco products should be sold in olive packages free from any branding, but also carrying graphic health labels, from December next year.

Philip Morris, occupies about 37% market share in Australia with its popular cigarette brands as Marlboro and Parliament. “We think that plain packaging law infringes the Australian Constitution as the Government is hoping to get our property without paying any compensation,” company representative Chris Argent said in an interview. According to Mr. Argent, Philip Morris Asia was looking for a ruling from the Australian High Court, the country’s supreme judicial body, that the government could not stop the company from using brand name on its cigarette packaging. Philip Morris’s Australian subdivision employs more than 800 people. Not long ago, British American Tobacco and Imperial Tobacco started separate High Court challenges.

Philip Morris announced last month that it was demanding arbitration over the new laws. “Tobacco giants are struggling against the government for a very evident reason, they understand that plain packaging will have it effect. While they are fighting to protect their profits, we are struggling to protect people’s lives,” Attorney General Nicola Roxon said. For instance in 2005, the World Health Organization prompted the countries to implement the plain packaging law, tacking into account that more than 1 million people are heavy smokers, 80% of them leave in poor countries.

The Himalayan nation of Bhutan prohibited the sale of smoking products this year. Experts from tobacco industry declare that tobacco companies are afraid that plain packaging could extend to significant developing markets as Brazil, Russia and Indonesia, and thus affect growth there. Legal experts have forecasted that both legal and WTO challenges will break down as intellectual property rights conventions allow governments the right to adopt laws in order to protect public health.

Australia’s cigarette market acquired total profits of about A$10 billion in 2009, higher than A$8.3 billion in 2008, despite the fact that smoking has been decreasing. According to recent findings about 22 billion cigarettes are sold in the country annually. Last week Britain has decided to postpone its consultation on plain packaging law as it currently thinks over a number of issues after Australia passed the new laws.

By Steve Shepherd, Staff Writer. Copyright © 2011 Cigarette-Store.org. All rights reserved.