For an industry that has thrived off effective marketing, from the rugged mystique of the Marlboro Man to the women’s lib appeal of Virginia Slims, Australia’s new “plain packaging” rules are a further sign of how the tide has turned.
“Much of this industry is about image. It is not about tobacco,” said Robert Stumberg, a Georgetown University law professor who has followed tobacco litigation and regulation around the world. For tobacco companies, Australia’s rules and similar proposals “get to the heart of their ability to market their products.”
With an estimated half-trillion dollars in annual sales, tobacco remains big business despite the regulatory backlash over the health impact of its use. The Australian rules are the strictest in the world, a step beyond regulations adopted in the United States and Europe and under consideration elsewhere. They dictate virtually 100 percent of the colors, images and words used in packaging cigarettes and cigars and have become the subject of an intensifying fight by tobacco companies to hold onto some vestige of brand control.
The companies have joined with a handful of developing nations, including Indonesia and Honduras, that share an economic stake in tobacco branding and are fighting Australia’s rules. If the popularity of Camels is threatened by the lack of a camel on the label, high-end Cuban cigars may be just as much at risk if they come wrapped in grisly images instead of a classy wooden box.
That’s what Australia has demanded, and it has touched off a war being fought in domestic courts, at a Geneva-based agency that enforces world trade treaties and through obscure arbitration panels working out of organizations such as the World Bank.
Anti-smoking activists regard Australia’s new rules as a bellwether in their drive to eliminate tobacco advertising and branding of all sorts. The companies have mustered an array of arguments in response: that the restrictions violate free speech, “expropriate” the value of carefully created trademarks, go against international free-trade obligations and won’t achieve the intended regulatory aim.
Philip Morris Asia spelled out the stakes in a trade case filed by its Hong Kong branch under the terms of an investment treaty between Hong Kong and Australia.
Without its branding, “Philip Morris’ products will not be readily distinguishable to the consumer from the products of its competitors . . . .
[Philip Morris] will be reduced to the manufacturer of an effectively undifferentiated commodity.”