UK
Two of the world’s largest tobacco companies, British American Tobacco (BAT) and Philip Morris International (PMI), have filed suit against the British government at the High Court in London in an effort to overturn its new laws. PMI said the new legislation on plain packaging illegally deprived it of its trademarks without compensation by banning the use of branding and insisting that health warnings take up over half of the surface of the pack.
In a statement, PMI’s general counsel Marc Firestone said: “The UK government rushed out the regulations, with many serious questions left unanswered. A wholesale ban on branding distorts the market and treats consumers as if they’re not capable of making their own decisions.”
The industry also argues that plain packaging encourages fakes and smuggling.
PMI was joined as plaintiff by BAT. The two are expected to seek some £11 billion (US$17 billion) in damages, according the The Scotsman newspaper.
“Legal action is not something we wanted to have to consider and is not something we undertake lightly, but the UK government has left us with no other choice,” said a BAT spokesperson.
“Any business that has property taken away from it by the state would inevitably want to challenge and seek compensation.”
The law was approved by the parliament earlier this year and goes into effect in 2016. It comes on top of new restrictions on retailers that came into effect in April, stopping them from openly displaying cigarettes on sale.
In their filings, both companies say that it violates EU law for a company to be able to use its trademark in Europe, but not the UK.
This is not the end of the story. Under proposed changes to the European Union’s directive on tobacco product use, it may soon become illegal to sell smaller packs of less than 20 cigarettes, a move intended to restrict cheap access to cigarettes and cut purchases by low-income or impulse buyers.