THE WTO’S “DECISION” ON PLAIN PACKAGING FOR CIGARETTES: WILL ALCOHOL BE NEXT?
Pursuant to the Tobacco Plain Packaging Act 2011 (“the Act”), tobacco companies in Australia are required by law to sell their products using a generic drab dark brown packaging that features large, aesthetically-confrontational health warnings. The intention is to make cigarettes unattractive to smokers. There is also a requirement for the inclusion on packaging of the Quitline logo of the Victorian Anti-Cancer Council (Quitline, as the name suggests, is a telephone counselling service offering assistance to smokers in ceasing their habit) and a telephone number for the Quitline service. Cigarette packaging in Australia is not allowed to feature logos. There significant restrictions upon the colour, shape and finish of cigarette retail packaging. The rationale is that the absence of overt marketing will bring down smoking rates. In response to the legislation, various tobacco manufacturers brought proceedings in Australia against the Australian Federal Government, alleging amongst other things that this constituted a government confiscation of property, and lost in a majority of decision of the High Court of Australia in 2012 (JT International SA v Commonwealth of Australia  HCA 43 (5 October 2012)). Other countries have since adopted plain packaging legislation for tobacco products.
The legislation was then subsequently opposed by various countries, led by Ukraine, by way of a complaint with the World Trade Organisation (WTO). This was filed in 14 August 2012. The complaint argued that the legislation was inconsistent with various obligations arising from the Trade Related Intellectual Property Agreement (“TRIPS”) and other treaties. The essence of the argument was that mandatory use of plain packaging, coupled with health warnings, have a tendency to curtail brand owners from marketing their products effectively through unique marks and design elements that are helpful to consumers. Additionally, the Act was argued to be hindering the tobacco industry from protecting and maintaining their trade marks, which has the effect of increasing the risk of counterfeits.
A leak of the outcome was reported by Bloomberg News in May 2017. It was revealed, prior to the delivery of the decision, that the WTO’s Dispute Settlement Body had ruled in favour of the Australian Government’s argument that the Act does not violate the country’s obligations under the TRIPS. The decision is scheduled for official release this month.
So, where is the leap from tobacco to alcohol? The spearhead for this comes from health-related studies. Public Health England’s report entitled “The Public Health Burden of Alcohol and the Effectiveness and Cost-Effectiveness of Alcohol Control Policies: An evidence review” dated December 2016 asked the UK Government to “consider plain packaging for alcohol products.” The Australian National University’s Australian National Centre for the Public Awareness of Science is presently involved in a study entitled “Would plain packaging for alcohol communicate health risk factors to youth?” In April 2017, the Centre for Behavioural Research in Cancer published a study entitled “Features of alcohol harm reduction advertisements that most motivate reduced drinking among adults: an advertisement response study” of Australian participants. The results were:
“An ad about the link between alcohol and cancer (‘Spread’) was most motivating, whereas an ad that encouraged drinking water instead of beer (‘Add nothing’) was least motivating. Top-ranked ads were more likely than other ads to feature a ‘why change’ message and less likely to carry a ‘how to change’ message; more likely to address long-term harms; more likely to be aimed at the general adult drinking population and more likely to include drinking guidelines. There was substantial overlap in top-ranked ads for younger versus older adults, men versus women and high-risk versus low-risk drinker subgroups.”
On 21 April 2017, the industry body Alcohol Beverages Australia loudly rejected the idea of plain packaging for alcohol. The concern in the alcoholic beverages industry is that the success that governments have had in quashing cigarette branding could be visited upon wine and spirits bottles and beer containers.
But alcohol plainly causes significant damage to people and has a societal and financial cost to a jurisdiction which a government shoulders. If cigarettes can be regulated in this way, why not wine, beer and spirits?
Plain packaging of alcoholic products would have a substantial effect upon many businesses. This includes small wineries and craft breweries and distilleries, which are usually small businesses quite different to multinational tobacco companies. Taking away the branding of such businesses would very likely have a seriously negative economic impact upon Australia, especially in the wine sector and upon sales and tourism in wine regions. Many consumers of wine are not sophisticated – they rely upon things like attractive names, logos, labels, awards and so on. From a trade mark law perspective, the Australian Trade Mark Register as at today’s date records 26767 pending and registered trade marks for wine and spirits (class 33), and 19033 pending and registered trade marks for beer (class 32). In comparison, there are only 4035 pending and registered trade marks for tobacco-related products (class 34). (Of those, 659 were filed between 1 January 2010 and 31 December 2012 as tobacco companies bolstered their trade mark portfolios, perhaps to support the argument that they each had more to lose if their property was misappropriated by the Federal Government.) Disconnecting trade mark rights in beer, wines and spirits brands from trade mark use of those brands would effect a substantial portion of the economy. The Federal Government might end up facing a very difficult decision if it begins to explore this strategy.