Big losses for Big Tobacco

By Abbhirami Rajagopal

Six million people die annually as a result of tobacco. Many governments have adopted the WHO framework for tobacco control and have since taken measures (policy changes, cessation programs, etc.) to reduce mortalities and morbidities that occur due to tobacco. Not surprisingly, big tobacco companies like Philip Morris International have pushed back against countries that have enacted stringent packaging laws.

In a much-awaited decision, Australia won an international legal battle to uphold its tobacco policies that include the plain packaging laws. Australia has enacted some of the toughest measures to reduce the harm caused by tobacco and plain packaging laws are among them. These laws are intended to prevent the tobacco companies from displaying their distinctive designs, colors or even their brand logos (companies can include their names and logos, but they cannot have flashy, enticing packaging). Instead, the companies would be required to use olive-green packs with health warnings and graphic color images that would cover nearly 75% of the front of the packs. The Plain Packaging Act passed by the Australian parliament became law in 2011 and, shortly thereafter, Hong Kong-based PMI sought legal action against Australia citing that, by stripping logos off the packs, these stringent laws violated the bilateral investment treaty between Australia and Hong Kong, thereby severely diminishing their brand value.

This is not the first time Philip Morris has dragged governments into legal battles over stricter anti-smoking and tobacco laws.

While global rate of lung cancer mortality was increasing between 1990 and 2013, owing to stricter anti-tobacco measures, Uruguay saw a 15% reduction in lung cancer mortality. PMI, a company whose revenues were nearly $80 billion in 2013, sued Uruguay, a small country of 3 million with a GDP of about $56 billion, in 2013. The lawsuit was brought to the International Center for Settlement of Investment Disputes (ICSID) in 2010 and the company is seeking $25 million in damages from Uruguay, once again, citing violation of bilateral investment treaty between Uruguay and Switzerland. The ICSID is expected to settle this case by arbitration.

The upholding of the anti-tobacco laws in Australia will hopefully set a precedent and allow countries to move forward with legitimate public health actions to curb the global tobacco epidemic without interference from tobacco companies.

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