Australia Triumphs Definitively In Long-Running Battle With Big Tobacco Over Plain Packs For Cigarettes

from the no-sacred-right-to-use-trademarks dept

Techdirt has written a lot about corporate sovereignty — also known as “investor-state dispute settlement” (ISDS) — which allows companies to haul countries before special tribunals for alleged loss of profits caused by new laws or regulations. One industry’s use of ISDS that Techdirt has been following particularly closely is tobacco. As a typically brilliant John Oliver segment explained back in 2015, Big Tobacco companies have used corporate sovereignty clauses in international trade and investment deals to sue countries for daring to try to regulate cigarettes, advertising or packaging. Thankfully, that didn’t turn out so well. Philip Morris tried to use ISDS to roll back plain-pack laws, but cases against Australia and Uruguay were both thrown out. The tide against the use of corporate sovereignty by tobacco companies to undo health protection laws has turned so much that special carve-outs have been added to trade deals to prevent this kind of corporate bullying.

But the tobacco industry had one last trick up its sleeve. John Oliver noted five years ago that Big Tobacco persuaded three countries — Honduras, Dominican Republic and Ukraine — to file complaints with the World Trade Organization (WTO) against Australia, claiming the plain-packaging law violates trade agreements. As an article in the Financial Review explains, they were later joined by Indonesia and Cuba. A dispute panel backed Australia in June 2018, but Honduras and the Dominican Republic appealed against that decision. Now the WTO’s Appellate Body has made its final ruling:

The Appellate Body confirmed the previous WTO ruling, which said that when Australia prevented tobacco producers from differentiating themselves from their rivals via brand marketing, this wasn’t necessarily a restriction on trade.

It also rejected the argument that raising the purchasing age or increasing tobacco taxes were less trade-restrictive options that Canberra could have pursued instead of the plain packaging rules.

And it said that the international intellectual property regime didn’t give tobacco companies a right to use a trademark; it merely stopped competitors from using it. So there was no obligation on Australia to allow a company to use its trademark, and the plain packaging regime hadn’t “unjustifiably” encumbered companies’ trademark usage.

That last point is particularly interesting. As far back as 2011 the tobacco companies tried to argue that “plain packaging has a smothering effect on companies’ logos and trademarks.” The WTO has just stamped on the idea that companies have some kind of sacred right to use their trademarks, which could have wider implications.

As for the main attempt to get rid of plain packs in Australia, that has now failed definitively — there is no way to appeal against the WTO Appellate Body’s ruling. That means that many more countries around the world are likely to bring in plain-pack laws — a real victory for Australia’s tenacious pursuit of this important health measure.

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Comments on “Australia Triumphs Definitively In Long-Running Battle With Big Tobacco Over Plain Packs For Cigarettes”

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It also rejected the argument that raising the purchasing age or increasing tobacco taxes were less trade-restrictive options that Canberra could have pursued instead of the plain packaging rules.

Obviously the WTO doesn’t know about the taxing regime on cigarettes’ in Australia. The tax amount increases every quarter (which then increases the price of cigarettes), and currently the ‘cheapest’ brands are approx $50 AUD for a single pack of 40 – which would be about $35 US dollars per pack.

More expensive brands can cost up to $70 AUD for a single pack of 40 – which would be close to about $50 US dollars per pack.


Call on health system versus smoking...

A trusted, highly knowledgeable medical professional+healh system administrator told me (back in the 1970s) that the "rule-of-thumb" amongst people in health administration positions was that the majority of most people’s call on the health system was in the last two years of their life.

So, despite all the apparent costs borne by the system over that end-of-life time, you can simply write it off and ignore it entirely — it’s a sunk cost.


My observation: One of the ironic things about significant smokers’ chances of being terminally ill rises at about retirement age: So, if the "two years" rule is accurate, then if people become terminal at around the time they retire, then the Government has saved potentially tens or hundreds of thousands in pension/allied services payouts.

How many times have you heard something along the line: "Poor old Fred: A really good hard worker all his life, yes he smoked, but just when he was looking forward to retiring, $DISEASE came along and struck him down, in short time… what a shame!"

It’s a win-win for the Government, when taxes are added in.



Re: Call on health system versus smoking...

Actually, this ties in quite nicely with the costs of two common vices in world regarding taxes and cost to society. Those vices being tobacco and alcohol.

For tobacco, the income obtained via taxes and the cost to society via health care, pretty much balance each other out. And the adverse effects are generally restricted to the tobacco users themselves. Basically, they kill themselves off before they cost society too much.

Alcohol on the other hand is a different story. The income obtained from taxes is less than the cost to society. They don’t tend to die young and thereby remove themselves from the health care system. Additionally, they cause damage to non-users (drunk driving) that result in victims incurring health care costs.


Re: Re: Call on health system versus smoking...

"And the adverse effects are generally restricted to the tobacco users themselves"

Well, now that most of society has changed enough so that they’re forced out of any room where others are trying to breathe, at least. A few decades ago, where they polluted every office, bar and other public spaces with dangerous second hand smoke it was a different story.

"The income obtained from taxes is less than the cost to society"

I’d like to see the figures on that. Yes, there’s some dangerous idiots, but they’re not the majority. For every moron who decides to drive drunk, there’s others who just stay at home or make sure they have a ride arranged. What are they costing society when they decide to have a night with friends?


Re: Re: Call on health system versus smoking...

"And the adverse effects are generally restricted to the tobacco users themselves".

Wrong, three million non-smokers die every year from environmental smoke produced by tobacco addicts. Besides, who wants to see their loved ones slowly die from lung cancer?


Re: Re: Call on health system versus smoking...

This is somewhat interesting because I’d bet that you, the same person pointing out the dangers of smoking and alcohol, are also against the war on drugs. If all drugs were legalized what do you think would happen then? What of the societal impacts of unchecked heroin or meth users?

I’m not saying I’m in favor of the war on drugs, just pointing out the potential hypocrisy. I actually agree with you though you didn’t really make any claims. And I lean against the war on drugs. Your comment just made me realize that I am somewhat hypocritical on this point and suspect many more are as well. How to square the two positions?

James Burkhardtsays:

Re: Re: Re: Call on health system versus smoking...

Fun note: if you end the war on drugs, it doesn?t mean you stop caring about the effects of drugs on society. we just don?t need a military to do it. Drug addiction is a symptom of bad circumstances. focus on rehab, improve life curcumstances, and drug users tend to kick the habit in much higher numbers then when the focus is on criminal penalties.


Re: Re: Re: Re: Call on health system versus smoking...

Correct. There is no hypocrisy here – the idea is to decriminalize drug use and etc. Proponents of ending the War on Drugs are mostly concerned with shifting how drug use is dealt with. Rather than tossing in people in jail or fining them etc. the focus shifts to helping people overcome the addiction.

Rather than pushing all the coke/meth/heroine etc. stuff into the unregulated underground and depending on police to fight it via attempts at suppression or busting the dealers or etc. etc. etc. (which have been oh so successful) you work on addressing the reasons why people turn to drug use in the first place.

All that money that goes into the DEA could be going into social services, good rehab programs, training programs, etc. to help people get out of the ruts that got them into drug use in the first place. Limited authorized recreational use of certain drugs (such as marijuana) under the exact same justification that leaves alcohol and tobacco available for legal purchase could also help.

The War on Drugs is essentially a means to enrich those who "fight" it at the cost of the victims of drug addiction, while simultaneously oppressing a subset of the population and ensure that what amounts to slave labor remains available via mass incarceration.


Re: Re: Re: Re: Re: Call on health system versus smoking...

The other thing that happens with decriminalization is that the big dangerous cartels lose power. It takes a while, though, as they will move further into other rackets, and other places will still have drugs criminalized. We practically invented large-scale organized crime with Prohibition, but took a while to severely curtail its prevalence. So yeah, the sooner we start…


Re: Re: Re: Call on health system versus smoking...

" war on drugs"

The war on drugs is a misnomer. The intent of the war on drugs was/is not to stop the smuggling, dealing and use of "drugs", but rather to be used as a weapon against the hippies and African Americans who were at the time being very vocal about their anti vietnam war opinions. This was a huge failure, of course.

Many who oppose the war on drugs do so not because they are hippies who just want to get high, they are against the ridiculous policing policy and procedure surrounding the war on drugs, they also are a bit concerned about the rampant corruption.

If all drugs were legalized, what do you think would happen? Have you read any studies on the subject? How about any studies on the legalization of weed and the resulting changes in usage if any. You might find the conclusions to be of interest – in several locales the usage amongst teens went down. I do not know how they get teens to tell the truth about these things – but …. that is what they claim. Do you have evidence to the contrary?

Why do you claim it is hypocritical? Just because of your preconceived notions or do you have data in support of the claim? When the war on drugs is not about the drugs but is all about oppression – how is it hypocritical to oppose these outrageous actions?


Re: Re: Re: Re: Call on health system versus smoking...

Yes, the "drug war" was basically started by Nixon to attack political enemies. It has been continued as an ongoing attack on many categories of "undesireables." It is one aspect of the broader war on individual rights.

Portugal, Uruguay, the Netherlands, and several of the US states have started to rein in this abomination, to varying degrees. The results have been overwhelmingly positive, by economic, health, and crime metrics.


Re: Re: Call on health system versus smoking...

People die at a any age from various activities, not last 2 years of their lives.

I had always heard that people died on the last day of their life. But I have not verified this with any large-scale testing, so I must defer to your judgment, and can only thank you for refuting what must have been a politically-motivated fake statistic.

Do you have any insight on when people are born?


Re: Re: Call on health system versus smoking...

Your idea and entire premise is entirely wrong.

People die at a any age from various activities, not last 2 years of their lives.

You’re reading my original post as if I was dealing in absolutes… well, no. There were qualifying phrases such as:

  • (back in the 1970s);
  • "rule-of-thumb" amongst health administrators; and
  • the majority of most people’s call on the health system was in the last two years of their life;

I’ll admit to a level of bias that I didn’t properly evaluate: My source was involved heavily in later-in-life institutions, including places where dementia or Post-Traumatic Stress Disorder were heavily dominant. My bad.

While my fingers are on the keyboard, a couple of new items:

  1. Antibiotics, such as penicillin, have been "wonder dugs": For example, childbirth in late 30s-onwards used to be fraught with danger (death of both mother and child). Procedures such as Ceasaren Section have also been made more feasible. As "Superbugs" — antibiotic-resistant germs — become more prevalent, the mortality rate in this area (as well as dozens of others) may rise sharply in the future. Syphilis is another nasty disease that is steadily becoming more resistant (and, if left unchecked, may attack the brain, causing seizures, dementia, …).
  2. This is cruel but real: Governments do not have unlimited funds, so they must set budgets. In the health sector, the most direct result of this is the change in waiting times (queue length) for various conditions… including a calculation of resources applied to a condition, versus the number of people that might die while on the waiting list for treatment of that condition.

My source also noted that more spending is of limited value: If more resources are provided in the system, people’s use simply tends to scale up, and the queues remain as long as ever, and the people as unhappy as ever. (You could find analogue situations in topics such as "Internet Bandwidth" or "Public-Access Highways".

(e.g. Internet: plain text ->simple images->short audio->marked-up hypermedia->audio tracks->dynamic images->short videos->software packages/distros (CDs)->Full DVDs (video or data)->full movies->on-demand download streaming->real-time teleconferencing-> … ?… [You might disagree with some of these details, and/or ordering of items, but hopefully the general illustration is helpful.])

— recherche


N/T: What about the Vice of Gambling?

Just like there’s millions of places around to buy cigarettes, and millions of places around to buy alcohol (here in Australia), there’s a sickening, sickening number of millions upon millions of places where people can gamble.

The poverty caused by things like Poker Machines is a significant burden… so why does the Government persist?

Well… read through this fantastically-well written piece from Wired, entitled "Cracking the Scratch Lottery Code":


.., and you’ll see, yet again, that the Government is making calculations about what’s going on (I won’t say more, for fear of creating a spoiler about the contents of the article).

— recherche


Re: N/T: What about the Vice of Gambling?

Good point.

The bottom line, while sensible people never gamble and see it as detestable behavior, it’s how people that are a net drain on society (see footage of current riots) pay taxes.

I mean, they still take far more from the society (via welfare, ER visits, food stamps, incarceration and court costs, vandalism, trauma to victims, etc) than they give, but at least the taxes on those lotto cards contribute something back into the system.


Re: Re: N/T: What about the Vice of Gambling?

"while sensible people never gamble"

Define "sensible". Lots of normal people buy the occasional lottery ticket or have a bet on the Grand National or have a bit of fun when in Vegas without adverse consequences.

"I mean, they still take far more from the society (via welfare, ER visits, food stamps, incarceration and court costs, vandalism, trauma to victims, etc) "

Oh, you’re an idiot who not only thinks that gamblers are always unemployed but are also criminals. Never mind

There are some who fit the bill, but they’re not all of them by a long shot. Source: I worked for gaming companies in Gibraltar for years and saw many famous successful names on the high roller lists

There certainly are problematic gamblers, but as with drinkers you’re way off the mark if you think they all fit your stereotype of homeless losers.



raising the purchasing age or increasing tobacco taxes were less trade-restrictive options

They actually tried to make this argument?
I wonder what they would have said if Canberra had raised the purchasing age to 150 years and increased the taxes to 53 gajillion AUD per pack? "Cool! It sure beats that scary warning wrapper!"


Re: Re:

While inhaling tobacco smoke is certainly more dangerous than inhaling, say, smoke from your barbecue, inhaling any smoke on a regular basis is hazardous to your health. For that matter, regular exposure to anything, even things that are normally considered healthy, is hazardous to your health. Even water, if you stay in the tub for days at a time. Just try to pick things that are less hazardous than others and limit your exposure to them as much as you can.



i cannot see how plain packaging can be considered a public health measure. sumptuary taxation and age restrictions may aim to reduce smoking, but plain packaging cannot be claimed to have that effect. its only effect is to prevent any consumer preference by brand or type, and arbitrarily throw all tobacco processors into a common pool, which pretty clearly interferes with their ability to distinguish their products in the market. the benefit of this policy has by no means been demonstrated or even rationally justified.


Re: smoking

Their plain packaging is not entirely brand-less. When you ask for a pack of Marlboros, you get a pack of cigarettes branded elsewhere as Marlboro. The name "Marlboro" is still on the packaging but there is no fancy logo or imagery. Just a basic pack with a photo of someone suffering from smoking and lots of warnings.


Re: Re: smoking

This "plain packaging" thing is odd to me. If the cigarettes are so dangerous as to require these bizarre packaging regulations, then aren’t they dangerous enough to ban outright?

I understand the governments are trying to strike a fine balance between reaping the tax rewards while still discouraging a dangerous behavior. But this fine line is morally unjustifiable.

These weird laws are half measures. Have the courage of your convictions and just prohibit them altogether.


Re: Re: Re: smoking

Prohibition has some serious problems.

Reference: Prohibition of Alcohol, attempted in the US of A circa early 1900’s.

Also reference: War on Drugs, attempted in the US of A circa right-the-fuck-now.

Prohibition doesn’t actually stop the usage of the product, and in fact tends to create more problems as the legalized substance now becomes a black market substance, and enforcement of the ban starts becoming an arms race against those who want to use the substance and those who want to sell it to them.

So, no – I come down on the side of "don’t prohibit, but do heavily regulate." By letting it happen but making sure there are lots of regulations to minimize the second-hand effects and also make it inconvenient but not impossible, you can seriously dampen the trade in the substance while not bringing in all the difficulties that an outright ban would have.


Re: Re: Re: smoking

"This "plain packaging" thing is odd to me. If the cigarettes are so dangerous as to require these bizarre packaging regulations, then aren’t they dangerous enough to ban outright?"

They make lots of money from the habitual smokers, who would likely turn to the black market if denied legally, as would new smokers. Keeping them legal to pay for the medical bills of current smokers while doing what you can to discourage the next generation is probably the best course of action.


Re: Re: Re: smoking

See my comment above about the rule-of-thumb "last two years is when (generally otherwise healthy) people have their main call on the health services".

The Government wins when working people die just near retirement age.

The proliferation of places where you can purchase cigarettes, with a Government-provided license, is proof of this.

As always, I’ll add a new angle into the "fray": There’s some suggestion that the apparently-negative messages on the packs tend to "backfire" — they reinforce the (self-destructive?) behaviours of the addict/buyer. [Sorry, but I cannot find a reliable reference to back up this anecdote.]

[One more item — another "mea culpa" — sigh.]

And I agree 100% with the commenter that pointed out that merely being alive means that you’re automatically exposed to risks — large and small — and so you must "gamble" on options (e.g. when is it safe to cross the road?) all the time. Even the very next breath you take in might contain the speck of asbestos that ends up killing you (via mesothelioma in your lungs).

So, rather than try and flee from risks, try to accept the reality, and work on being better managers of risks (that occur in multiple, overlapping, sometimes conflicting, contexts).

— recherche


Re: Re: Re: Re: smoking

"The Government wins when working people die just near retirement age. "

Only if your system is so corrupt that members of the government get to pocket excess funds from social programs, rather than being compelled to redirect them into other areas that may be underfunded. That seems way more problematic than when unhealthy people happen to die.


Re: smoking

"its only effect is to prevent any consumer preference by brand or type"

Which includes advertising to non-smokers, including the more vulnerable younger kids who might take it up if they’re attracted by the branding.

It might seem like nonsense, but there’s reasons why Joe Camel and the Marlboro Man were successful ad campaigns.

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