Cigarette packs 'last' advertising space

Cigarette packs 'last' advertising space

Big Tobacco is challenging Labor's plain-packaging laws because cigarette packs are the last space available for them to advertise their product, lawyers for tobacco companies have told the High Court.

Lawyers for British American Tobacco (BAT), Japan Tobacco International, Philp Morris and Imperial Tobacco Australia told a packed court on Tuesday that while the government already forced them to display health warnings, plain packaging would "extinguish" their brands and logos.

Under the federal government's laws all cigarettes and tobacco products will have to be sold in drab olive-brown packs from December.

Large graphic health warnings will dominate the packs, and the manufacturers' brand names - such as Camel or Winfield Blue - will be written in a small generic font.

Big tobacco's legal representatives are arguing that by assuming control of what goes on the packs the commonwealth is effectively acquiring their intellectual property.


That's unconstitutional unless just compensation is paid, the companies say.

"It is a vital space (on packs) because it's the last space available," Alan Archibald for Philip Morris told the court in Canberra.

"The packet (under the legislation) has become a servant of the commonwealth's purpose."

Imperial Tobacco's senior counsel, Bret Walker, said the cigarette companies were like a frog that realised it was about to be cooked.

However, the court also heard the commonwealth could only be said to have unlawfully acquired big tobacco's property if it benefited in some way.

Many of the High Court justices on Tuesday questioned how that could possibly be the case.

Justice Kenneth Hayne repeatedly asked how the commonwealth would benefit by forcing manufacturers to run large health warnings on the front and back of the plain packs.

The tobacco companies responded by arguing the government wasn't paying for the space. Neither was Quitline, whose stop-smoking helpline number will appear on the packs.

BAT's barrister, Allan Myers, said the plain-packaging law stripped his client of the substance of its trademark.

"It gives the benefits that would have accrued to my client to the commonwealth," he told the full bench, adding that benefit was "the assumption of control" over the packs.

Mr Walker also distinguished between legitimate warnings on rat poison which explained how to use the product safely, for example, and the messages on the plain packs which were all about "destroying" a lawful product.

They were a "political admonition that you should not smoke", he said.

But Justice Virginia Bell said the difference was more clear cut than that: rat poison could be used safely, but cigarettes, if used as intended, killed.

Early in Tuesday's proceedings, Chief Justice Robert French pointedly noted: "The commonwealth doesn't have the right to use your trademark as a result of this legislation."

Justice Susan Kiefel wanted to know why it couldn't be said the commonwealth was simply involved in a "considerable restriction" of the manufacturers' trademarks without itself benefiting.

"The loss of something may not equate to the commonwealth's acquisition," she said.

Federal Attorney-General Nicola Roxon spoke to reporters outside the court before the three-day hearing began.

"Regulating the way tobacco is sold in Australia is something that is lawful for any parliament and any government to do," she said.

"Over many decades we've taken steps to introduce tobacco-control measures and this is the next step."

Big Tobacco is throwing everything at the legal challenge because it is worried other countries could follow Australia's lead if the government wins the day.

BAT says the battle will be a test case for the validity of plain-packaging legislation.

Solicitor-general Stephen Gageler will outline the commonwealth's position on Wednesday morning.

The hearing is expected to run until Thursday with a judgment due by mid-year.