The Smoke-free Environments (Tobacco Plain Packaging) Amendment Bill (“the Bill”), which aims to amend the Smoke-free Environments Act 1990 (“the Act”) to regulate the branding of tobacco and herbal smoking product packaging in New Zealand, passed its first reading on 11 February 2014. 118 Members were in favour, and one Member opposed.

The Bill will now enter the Select Committee process. The public is entitled to make submissions on the Bill.

According to the Explanatory note to the Bill:

“Tobacco packaging has been used as an effective form of tobacco marketing, supported by innovations in tobacco product design and appearance. The legislation seeks to remove what is in effect the last major promotional mechanism available to the tobacco industry.”

Specifically, the Bill seeks to introduce a regime which would:

  • prohibit the use of tobacco company branding imagery and other marketing devices on tobacco product packaging, and on the tobacco products themselves;
  • regulate how a tobacco brand or company name is represented on tobacco product packaging;
  • standardise the design of tobacco product packets, including the size and colour of the packaging, and the fonts that may be used;
  • increase the pertinency, prominence, and size of health warnings on tobacco product packaging.

The specific details of the regime which dictate the parameters of the packaging design have not yet been released, as these will be contained in the regulations which will be made under the Act, if it is passed into law. However, the plain packaging regime will be modelled after the Australian regime, and modified to suit New Zealand circumstances.

The Bill, if enacted, would have serious consequences for trade mark owners. The plain packaging regime would not just prevent the use of many registered trade marks on tobacco products, but would also introduce strong penalties for breaching the provisions of the regime: a fine of up to $600,000 for manufacturers, importers, or distributors; a fine of up to $200,000 for “large retailers”1; and a fine of up to $50,000 “in any other case”.

The Australian plain packaging regime, the first and currently only such regime in force, is being challenged through the World Trade Organization by Indonesia, Honduras, Cuba, Ukraine, and Dominican Republic on the basis that the regime is inconsistent with Australia’s obligations under the Technical Barriers to Trade Agreement, the Trade-Related Aspects of Intellectual Property Rights Agreement, and the GATT 1994.

The New Zealand Prime Minister has said that the Government would only support the Bill through its first reading. It will then await the outcome of the challenges to the Australian legislation before progressing it further.

American lobby groups – including the United States Chamber of Commerce – and tobacco companies have voiced their opposition to New Zealand implementing a plain packaging regime.

The Bill amends the Designs Act 1953 by inserting into section 51 (which prohibits the Commissioner of Designs from registering designs which are contrary to law or morality) the following exception:

“However, the Commissioner may register a design even if its use is restricted or prohibited under the Smoke-free Environments Act 1990.”

A similar exception already exists in the Trade Marks Act 2002.2