Don’t be fooled, plain packaging is anything but plain

Sharon Givoni Consulting Consumer Law, Packaging, Retail and fashion Law

This article discusses the legalities of plain packaging for cigarette companies  

Takeaways

• Plain packaging was introduced to reduce the attractiveness and appeal of tobacco products.
• The numerous specific and detailed requirements make plain packaging legislation is difficult to navigate without legal advice.
• Failing to comply with plain packaging legislation can result in product recalls as well as severe fines for both suppliers and retailers and can even result in criminal penalties.

In December 2012, Australia became the first country in the world to implement plain packaging legislation for tobacco products through the Tobacco Plain Packaging Act 2011 (Cth). Plain packaging legislation was introduced to help reduce smoking rates and its harmful effects in the Australian community.[1] The rationale of plain packaging is to prevent tobacco advertising and promotion by reducing attractiveness and appeal of the packaging and to increase the noticeability and effectiveness of the health warnings.

A number of countries have since followed suit with similar standardised packaging including New Zealand, the United Kingdom, France, Norway and Hungary. However, the introduction of such control measures in Australia has not been smooth sailing.

In 2012, the High Court of Australia rejected the constitutional challenge to the introduction of the plain packaging legislation by industry giants Japan Tobacco International and British American Tobacco Australasia.[2]

There have also been international trade disputes brought by the Ukraine, the Dominican Republic, Cuba and Indonesia against Australia’s plain packaging requirements, including the measures concerning trademarks and geographical indications. These challenges were made on the basis that Australia’s plain packaging requirements are inconsistent with various obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the World Trade Organization (WTO) Agreement on Technical Barriers to Trade and the General Agreement on Tariffs and Trade (GATT).

After a five year legal battle, it appears that the World Trade Organization Dispute Settlement Body will find in favour of Australia on the basis that they qualify as a legitimate public health measure, however, the final ruling will not be released until July 2017.[3]

For now, it appears certain that plain packaging laws are here to stay. However, what cannot be said is that navigating the web of plain packaging legislation and regulations is an easy feat.

What is plain packaging and why is it a challenge?

Taken at face value, you would think that plain packaging meant something along the lines of blank, white and empty. However, the words ‘plain packaging’ are a bit of a misnomer and deceptively complex.

The complexity of the plain packaging legislation lies in the specific and detailed requirements that need to be followed. The legislation stipulates numerous requirements across various pieces of legislation from the colour of packaging to the font of branding and health warnings. Therefore, you may think that you have the perfect shade of ‘drab dark brown’ for your packaging, but did you know that the regulations also stipulate exactly what pantone of drab dark brown is required?

Further, you may also think that you are using the health warnings on your packaging comply with the requirements, but did you know that it needs to be in a particular font and of a particular size?

You may be surprised to learn how detailed the requirements are. However, our specialised knowledge in this area can help you get it right from the outset and help avoid severe penalties for non-compliance.

Why do you need to get it right?

Despite all these challenges, it is important to comply with the requirements to avoid both criminal and civil liability. You may be surprised to learn that not only the sale but also the purchase of wholesale tobacco products intended for retail sale is an offence under the Tobacco Plain Packaging Act 2011 (Cth). Further, both individuals and companies can be liable.

The price of getting it wrong could mean penalties of up to $360,000 for individuals or $1.8 million for corporations for fault based criminal offences. If health-warning requirements are breached, it could mean penalties of up to $220,000 for individuals and up to $1.1 million for corporations.

How can we help?

It is important to ensure you are selling or purchasing tobacco products that are compliant with the plain packaging legislation from the very beginning. We take the guess work out of navigating around the complexities and help you steer clear of the traps that the plain packaging legislation gives rise to.

Disclaimer: This article is of a general nature only and not to be relied on for professional legal advice.

[1] Explanatory Memorandum, Tobacco Plain Packaging Bill 2011.

[2] JT International SA v Commonwealth and British American Tobacco Australasia Limited v Commonwealth [2012] HCA 43.

[3]  Bryce Baschuk, ‘Tobacco Logo Ban Said to Get WTO Backing in Landmark Case’ 4 May 2017, available at https://www.bloomberg.com/news/articles/2017-05-04/wto-said-to-uphold-australia-s-ban-on-cigarette-logos.