Tobacco Asia

Volume 19, Number 3

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12 tobaccoasia FRONT PAGE NEWS 卷首新闻 WHO SAID WHAT? France Plain Packs Introduction France will soon require all tobacco companies to sell their products in plain packs starting next year. The measure is part of a reform passed in the lower house of parliament that also includes laws aimed at fighting anorexia, and new arrangements for funding consultations with doctors, which have triggered major street protests by medics. From May 2016, tobacco companies will have to sell cigarettes in plain packaging with photographs of internal organs damaged by smoking, with the brand name appearing only in small lettering. Smoking will be banned in the presence of children in cars, as will the use of electronic cigarettes on public transport and offices. UK Tobacco Firms Fight Plain Packs Two of the world's largest tobacco companies, British American Tobacco (BAT) and Philip Morris International (PMI), have filed suit against the British government at the High Court in London in an effort to overturn its new laws. PMI said the new legislation on plain packaging illegally deprived it of its trademarks without compensation by banning the use of branding and insisting that health warnings take up over half of the surface of the pack. In a statement, PMI's general counsel Marc Firestone said: "The UK government rushed out the regulations, with many serious questions left unanswered. A wholesale ban on branding distorts the market and treats consumers as if they're not capable of making their own decisions." The industry also argues that plain packaging encourages fakes and smuggling. PMI was joined as plaintiff by BAT. The two are expected to seek some £11 billion (US$17 billion) in damages, according the The Scotsman newspaper. "Legal action is not something we wanted to have to consider and is not something we undertake lightly, but the UK government has left us with no other choice," said a BAT spokesperson. "Any business that has property taken away from it by the state would inevitably want to challenge and seek compensation." The law was approved by the parliament earlier this year and goes into effect in 2016. It comes on top of new restrictions on retailers that came into effect in April, stopping them from openly displaying cigarettes on sale. In their filings, both companies say that it violates EU law for a company to be able to use its trademark in Europe, but not the UK. This is not the end of the story. Under proposed changes to the Euro- pean Union's directive on tobacco product use, it may soon become illegal to sell smaller packs of less than 20 cigarettes, a move intended to restrict cheap access to cigarettes and cut purchases by low-income or impulse buyers. China Tobacco Tax Raised to 11% According to the country's Ministry of Finance, China is set to raise the wholesale tax rate for cigarettes from 5% to 11% in a move to deter smokers in the world's largest producer and consumer of tobacco. China has accelerated a campaign against smoking over the past year. In April, the parliament passed legislation banning tobacco ads in the mass media, public places, on public transport, and outdoors. Cigarette wholesalers must also pay an additional RMB0.005 (less than 1 cent) per cigarette sold, a statement said. According to Bloomberg, the increased tax rate is expected to provide an additional RMB20 billion (US$3.2 billion) worth of taxes compared to last year. China's cabinet has issued a draft regulation to ban indoor smoking, limit outdoor smoking, and end tobacco ads. Many cities have already banned smoking in public places, but critics say those curbs are enforced unevenly, or not at all. The World Health Organization praised the tax hike, but added that the additional cost had to be passed to consumers for the measure to be effective. "Increasing tobacco taxes and prices is the single most effective way of reducing tobacco consumption in the short term," said Bernhard Schwartlän- der, the WHO representative in China. The campaign against smoking has picked up steam over the past several months, but the leadership and anti- smoking campaigners have faced tough opposition from the state-owned tobacco monopoly, which wields great sway because it contributes an estimated 7-10% of government tax revenue. "The evidence at trial, including the government's own polling and statements, demonstrated that the Canadian public has been aware of the risks of smoking for many decades. The trial court explicitly acknowl- edged this, but nonetheless held RBH liable to those who chose to smoke in light of these well-known risks." - Anne Edwards, Rothmans, Benson & Hedges Inc. spokesperson no Quebec class action suits

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