Tobacco firms to challenge plain packaging rules in High Court

The tobacco industry has proceeded with its threat to challenge the government’s plain packaging rules at the High Court, due to begin today.

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British American Tobacco (BAT), Imperial Tobacco, Philip Morris International (PMI) and Japan Tobacco International (JTI) are to argue the regulations will destroy their highly valuable property rights, and render products indistinguishable from each other.

The four companies control most of the £18bn UK market.

They will also argue plain packaging will be ineffective in reducing smoking levels.

The tobacco industry has threatened to take the government to court almost from the offset of the plain packaging debate, but these were often seen as intimidation tactics.

Smoking rates are declining up to 3% in the UK.

The new “standardised packaging” regulations which are due to take effect from May 2016 will ban companies from using any logos or branding on packets of tobacco, and must be printed in uniform dark brown or green colour featuring graphic images of diseases attributed to smoking.

Brand names must be in small, non-distinctive lettering – adding to the tobacco industry’s case of loss of intellectual property.

Imperial’s Lambert & Butler, along with its branding, was established more than 180 years ago.

The Department of Health is fighting the High Court challenge.

“Smoking is catastrophic for your health and kills over 100,000 people every year in the UK, with the burden of disease falling most heavily on poorer communities,” a government spokesman said, adding that the government would “robustly” defend the policy, and had powerful arguments in its favour.

Imperial, which sells the most cigarettes in the UK, said legal action was a last resort but tobacco companies “have been left with no option than to defend our intellectual property rights in court”.

PMI is expected to argue that plain packaging has not reduced smoking levels in Australia, the only country to adopt the policy, while JTI will say the industry should not be deprived of its brand property.

BAT will make an independent case that it was not adequately consulted by the government before the vote.

Mike Ridgway, director of the Consumer Packaging Manufacturers Alliance, said it was not surprising that the tobacco companies are taking this action, insisting that like all major consumer product producers, they have made very large financial investments in their brands which they need to protect.

“The action by any government in removing their brand names, logos and intellectual property deserves adequate and full compensation which could amount to billions of pounds. Even at this late stage Ridgway called upon the Government to suspend the introduction of plain packaging , scheduled for next May, until the legal processes have been completed as a sensible and prudent course of action and potentially saving the taxpayer funding any compensation.”

Sir Cyril Chantler’s 2014 independent review concluded that it was “highly likely” that standardised packaging would reduce the rate of children taking up smoking, and “implausible” that it would increase tobacco consumption.

The tobacco industry unsuccessfully sued the Australian government over the 2012 plain packaging policy – while the Australian High Court ruled plain packaging breached their intellectual property rights, the legislation was allowed to proceed because the government was deemed not to have acquired the property, as it received no benefit from taking it.