Thursday, 18th February, 2016

New Zealand to implement plain packaging for tobacco

Prime Minister John Key has announced that legislation requiring plain packaging for tobacco products will likely become part of New Zealand law by the end of 2016. The Government has had the legislation on hold pending the outcome of tobacco company Philip Morris’s challenge to the legality of similar legislation in Australia.

The details of the New Zealand plain packaging regime will be set out in regulations yet to be drafted. Assuming we follow Australia, all tobacco products sold in New Zealand will have to be packaged in plain, drab brown with no logos or branding other than the name of the product in plain script. The legislation will also broaden existing regulations around health messages on tobacco products to include warnings of wider adverse social and economic effects. 

Australia is currently the only country that mandates plain packaging for tobacco products, but other governments are under pressure from health advocates to implement similar regimes. Ireland, the United Kingdom, and France will require plain packaging from May 2016, and several other countries including Canada, India, and Turkey are considering its introduction. Research indicates that plain packaging increases smokers’ negative feelings about tobacco products, and since introducing plain packaging Australia has seen an increase in smokers thinking about quitting or trying to quit. The social and health benefits of plain packaging are not universally accepted, however.

Not surprisingly, tobacco companies are strongly opposed to plain packaging. British American Tobacco (BAT) sued the Australian government, arguing that the plain packaging legislation was unconstitutional because it resulted in an unjust acquisition of BAT’s intellectual property rights. Philip Morris challenged the legislation under Australia's Bilateral Investment Treaty with Hong Kong, seeking suspension of the plain packaging laws and compensation for the loss of trademarks. Neither of these challenges has been successful, but Australia still faces a slew of complaints lodged with the WTO by Ukraine, Indonesia, and others. Decisions on these are expected later this year. Tobacco companies have filed similar challenges in the United Kingdom, arguing that the plain packaging legislation violates EU trade mark law.

The New Zealand Government will no doubt have an eye to possible challenges to the New Zealand legislation. The TPPA contains a specific carve out from the investor-state dispute settlement provisions that allow the Government to rule out challenges by investor companies (but not states) over tobacco control measures. However, New Zealand is a party to other international agreements under which a challenge may be possible.

We will continue to watch and report on the progress of this legislation.