Précis - A recent decision in Australia's highest court will see the use of branding, logos, symbols and other images on tobacco packaging banned.
What? Australia's Tobacco Plain Packaging Act 2011 (the "Act") requires tobacco products to be packaged in plain packaging only. The purpose of the Act is to discourage the sale of tobacco products by reducing the attraction of tobacco packaging, particularly to adolescents. The packets themselves will now only be able to display brand names in a standard font, have a green background colour and will have to display pictures of the diseases that smoking may cause on the front and back of the packaging.
So what? Branding in the tobacco industry is important for driving sales and tobacco brands have global recognition. Cigarette manufacturers have claimed that the decision by the Australian Court infringes their intellectual property rights and will severely restrict their ability to market their products in Australia. The global implications may be even more damaging in the long term. Other jurisdictions including the UK, New Zealand, Norway, India, France and Canada were already considering new restrictions on the use of brands on tobacco packaging, and there is a concern that this decision may cause a "domino effect" in other countries.
It remains to be seen if other countries will emulate Australia and restrict the use of branding on tobacco products. And it will be interesting to see if this intervention moves outside of the tobacco industry. Given the value of their brands, cigarette manufacturers are likely to resist any further attempts to restrict their ability to use their branding on tobacco products.