From: The Press Association
Health Secretary Andrew Lansley has been warned that he could have to pay out billions of pounds of taxpayers’ money in compensation if he goes ahead with plans to strip brand marks from cigarette packs.
Ministers are consulting on proposals to require cigarettes to be sold in plain packages in an attempt to reduce the number of young people taking up smoking.
But tobacco giant Philip Morris said that the plans violated national and international law and could leave the taxpayer facing a massive bill for compensation.
In its submission to the consultation, which closes on Friday, the firm cited a legal opinion by Lord Hoffmann QC that removal of the distinctive brand marks would amount to the “expropriation” of the industry’s intellectual property rights. It pointed out that the big four tobacco companies had already mounted a legal challenge to similar proposals in Australia – the only country so far to announce that it intends to go ahead with plain packaging – and suggested the compensation payout in such a case in the UK would run to “billions of pounds”.
Launching the consultation last April, Mr Lansley said health ministers across the UK had a responsibility to consider any initiatives that might encourage smokers to quit and stop young people taking up smoking in the first place.
However the move is fiercely opposed by the tobacco companies who argue that it would not cut smoking levels and would simply lead to an increase in counterfeiting and smuggling.
In his legal opinion, Lord Hoffmann noted that the companies invested “very large sums of money” in building up distinctive brand images for their products.
“A prohibition on the use of the mark is in my view a complete deprivation of the property in that mark, notwithstanding that the proprietor might be able to distinguish his goods by the use of some other mark,” he said. “I can see no reason why depriving someone of his proprietary interest in a trade mark for a tobacco product (however much it may be in the public interest to do so) should be different in principle from any other deprivation in which compensation is required.”
A spokesman for Philip Morris said: “Plain packaging will not achieve the aims that Mr Lansley hopes for. It will mean an increase in counterfeiting and smuggling and the crime levels, often linked to terrorism, which go with those. It is also an attack on trademarks, which violates national and international law.”
The Department of Health said that no decisions had been made on whether to go ahead with the proposals. Public health minister Anne Milton said: “We have not yet analysed all the responses but have already received a substantial number. We have an open mind on this issue and will make a decision on any further action after we have considered the responses, evidence and other relevant information.”
