UK aims to pass law to ban branding on cigarette packs before May

[January 22, 2015]  By Andrew Osborn

LONDON (Reuters) - The British government said on Wednesday it would try to pass a law to force tobacco firms to sell cigarettes in plain packets without branding in England before May, ending years of debate and lobbying over the issue.

The move, aimed at improving public health and cutting the number of child smokers, is likely to crimp tobacco firms' profits and would see Britain follow in the footsteps of Australia, which two years ago enacted a groundbreaking law forcing cigarettes to be sold in plain olive green packaging with images showing the damaging effects of smoking.

Cigarette sales have dropped in Australia since plain packaging was introduced on Dec. 1, 2012, prompting Britain to move ahead even as Australia continues to battle international legal challenges from other countries and manufacturers.

Jane Ellison, a junior minister in Britain's health ministry, said introducing plain packaging was "a proportionate and justified response" because of the health risks associated with smoking.

"In doing so we would be bringing the prospect of our first smoke-free generation one step closer," she said in a statement.

The government previously said it wanted to ban cigarette branding but that it wanted to conduct a final consultation to make sure it was the right thing to do, stirring suspicion it wanted to further delay legislation.

The opposition Labour Party welcomed the move, but criticized the government for moving too slowly after MPs voted in its favor almost a year ago. Wales, Scotland and Northern Ireland will need to consent to legislation introduced in England.

Tobacco firms have fiercely resisted the new law, arguing that plain packs infringe on intellectual property rights covering brands and that they will only increase cigarette counterfeiting and smuggling.

Around 3.4 percent fewer cigarettes were sold in Australia in 2013, compared with 2012, according to Treasury Department data. The government had previously withheld data on sales to protect commercially sensitive information, and is yet to release the figures for 2014.

A quintet of tobacco-producing nations - Indonesia, Cuba, the Dominican Republic, Honduras and Ukraine - are challenging the Australian law at the World Trade Organization. Hearings are due to begin in May with a decision unlikely before 2016.

Philip Morris Asia Ltd is contesting the packaging in the international Permanent Court of Arbitration under Australia's bilateral investment treaty with Hong Kong. The court ruled last year Australia could challenge Philip Morris' right to contest the laws on the grounds the company only bought shares in its Australian arm to bring the case.

(Additional reporting by Jane Wardell in SYDNEY; Editing by Robin Pomeroy and Jeremy Laurence)

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