Issue link: http://read.dmtmag.com/i/550304
66 tobaccoasia companies of valuable intellectual property rights. It however, ruled in favor of Australia because the country's constitution uniquely requires the gov- ernment to receive a proprietary benefit. Apart from the issues of treaty violation, PMA argues that commoditizing tobacco products through plain packaging will harm public health and furthermore does not meet the Australian government's own test of 'evidence-based poli- cy'. The question is: does anybody actually know whether plain packaging will cut smoking rates? Shortly before the legislation was passed in 2011, Nicola Roxon, Australia's then Federal Min- ister for Health, admitted in Radio 3AW Mornings interview with Neil Mitchell that there was "some level of experiment" in the new legislation. She later told the The Herald Sun, "The sort of proof they're looking for doesn't exist". Having conducted interviews with more than 5,000 smokers and non smokers before and after the legislation came into force, the report conclud- ed that, "Over the timeframe of the analysis, the data does not demonstrate that there has been a change in smoking prevalence following the intro- duction of plain packaging and larger health warn- ings despite an increase in the noticeability of the new health warnings." Other reports confirm that, since the new leg- islation, the illicit trade in cigarettes has climbed. A report by KPMG on illegal tobacco in Australia, commissioned by the industry and released in Oc- tober, has significant findings. It says the level of illegal tobacco consumption has reached record levels, growing from 11.8% to 13.3% from June 2012 to June 2013. In the main, this is down to consumption of illegal branded cigarettes, such as Manchester, which now has a 1.2% market share in Australia, up from 0.3%. This is greater, for instance, than Kent or Camel. Consumption of counterfeit cigarettes has also increased. The jump in black market branded cigarettes stands at 154%, a rise that has surfaced at the same time volumes of illicit unbranded tobacco, known as 'chop chop' in Australia, have declined by 40%. The report states that if these black market purchases had been made in the legal market, the government would have collected AUD$1 billion in additional excise tax revenue. And then there's the impact on retailers to consider. In August, a study conducted by inter- national research company Roy Morgan, commis- sioned by PM Australia, revealed that "since plain packaging was introduced, 43% of small retailers surveyed in Australia perceive an impact on their business from illegal tobacco, up from 36% in De- cember 2012". All these factors in the PMA dispute will play some role, too, in the WTO action brought by Ukraine, Honduras, The Dominican Republic, Cuba and Indonesia. If the WTO panel rules that Australia's law breaches international trade rules and damages these countries' economies, the im- plications will have a ripple effect. The UK and New Zealand have already rejected or shelved plans for similar plain packaging laws, and 12 ter- ritories, including the EU, have joined the WTO consultations, some as neutral observers. All will be watching closely. Notes of caution are wise, but there is room for optimism. As The Australian newspaper noted, "The WTO was set up to spread free trade, and defendants rarely win cases before its disputes panels." "The sort of proof they're looking for doesn't exist" And even after the legislation came into force in December 2012, there was no change in tone. In a July 2013 interview with The Australian, in which then Federal Health Minister, and now deputy leader of the Labour Party, Tanya Pliber- sek criticized the UK government for dropping plans to introduce plain packaging, the newspaper said she commented that "data was unavailable on whether the introduction of plain packaging in Australia had hit cigarette sales". However, evidence is now beginning to emerge that, on the contrary, it has not hit sales. London Economics, commissioned by PMI, pub- lished the first comprehensive study measuring smoking rates in Australia since plain packaging was introduced. The study began with the statement, "As the overarching objective of plain packaging is to im- prove public health by reducing tobacco consump- tion, the core question in this analysis is whether there has been any change in smoking prevalence amongst the resident Australian population."