A Bill of the Federal Parliament Imposing Generic Packaging on All Tobacco Products Sold in Australia - Coursework Example

Australian Parliament Legislation Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecturer Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 9th May 2012. Topic Australian Government has introduced a bill into the federal parliament imposing generic packaging on all tobacco products sold in Australia. The move is strongly opposed by the tobacco companies, a powerful lobby if ever there is one. Analyse the legal authority the parliament has to enact the bill, and examine attempts by other legislatures to enact similar legislation. Consider both the arguments for and against, and the likelihood of the tobacco companies winning their mooted appeal against the act in the high court. Introduction In 2011, Australian government passed a bill in plan packaging (generic packaging) of all tobacco products to the companies that process tobacco. British American Tobacco Australia (BATA) took the issue to Australian high court stating that the bill enacted is unconstitutional and hence should be null and void. In addition, BATA argued that the government is trying to take their intellectual property (IP) without any compensation which is a violation of global rules on IP. Other organizations like world trade are also challenging the moves by other federal governments to stop imposing bill to tobacco processing companies. Pursuant to the passing of the bill, tobacco companies in Australia have launched high profile campaigns to challenge the bill. They are pinpointing that the bill will make them have unintended potential consequences that the bill will have (Anon 2004, pp.37). Australian tobacco companies were not alone but they were supported by Alliance of Australian Retailers in challenging the baseless government move. The alliance argued on behalf of small business owners (convenience stores), milk bars, newsagents and service stations who are employers of thousands of Australian population. The campaign helped the tobacco companies to have a transparent financial support. There have been many policies against tobacco manufacturing and use of tobacco in Australia but the most controversial one in the government policy on plan packaging though other organizations like health groups praised the move (Zimmel 2003, pp. 39) . Similarly, financial markets appeared to view the legislation as a big risk for industry profitability. To support this claims, investment bank instantly issued a statement expressing the view that plain packaging was the biggest regulatory threat to the industry in the sense that packaging is one of the most important way tobacco companies have to communicate with the consumer and differentiate their products. BATA also argues that generic packaging will make it hard for them to prevent imports that are smuggled to the country that are counterfeit hence eroding the government tax revenue. Consequently, the bill will interrupt with struggles to fight the unlawful trade in tobacco products that play a significant role in funding international crime and terrorism. Specifically, on Jury 2011 Australian Minister for Health and Ageing brought to the Australian parliament two bills namely; Tobacco plain packing bill 2011 and the Trade mark amendment. The aim of Tobacco Plain packaging bill 2011 was to improve health outcomes for Australians by minimizing the number of people who die annually due to the effects of tobacco. The argument from the Health groups states that the harmful and addictiveness of tobacco is sufficient to call for restrictions of all manner such as promotion. That is, packaging is one of the promotions and hence should not be allowed. The Tobacco Industries argue that plain packaging has no factual prove that it will result in reduced smoking. In addition, the bill will result in reduced sales hence incur losses. Finally, the bill will be a breach of international agreements regarding the intellectual property. Findings about the legislation The adoption of plain packaging bill would violate Australia’s obligations confined at international treaties which include Paris Convention and World Trade Organization’s Agreement. Specifically, article 15(4) that states that the nature of goods or/and services with which trademarks are applied shall in no case constitute a barrier to registration of the trademark. In addition, plain packaging will raise other constitutional issues more so by section 51(xxxi) of the Australian constitution which governs the acquisition of property on just terms. Thus, the trademark owner will be deprived of the use of its personal property and therefore issues arise as to whether trademark owners should be compensated on just terms for that expropriation. Trademark Act 1995 gives the trademark owners the rights to exclusive use of personal property as defined under section 21 of the same Act. Section 20 and 22 of the Act provides as follows; section 20 states that the owner of the trademark has the right to use the trademark and to authorise other persons interested to use the same trademark of which the good and services are legally registered. Section 22 on its part state that the registered owner of the trademark may be vested in another person and use the trademark as the absolute owner. The Australian High Court actions are being watched closely all over the world since the case is one of its kinds. BATA claims that the legislation is unconstitutional hence the government will illegally own the intellectual property without any compensation to the companies (AG 2010, pp. 1). On the other hand, the government denies that the bill is unconstitutional and insists that it will fight for validating the legislation. In fact, the government said that the bill was a legitimate measure to achieve the protection of public health. The case against the plain packaging legislation comes at a time when in Britain they are trying to examine whether tobacco companies should follow the suit with plain packaging in UK. Also, Australia has the toughest smoking regulations in the world such as it is illegal to smoke in all public places such as bars, restaurants, entertainment joints, parks and outdoor areas. The Australian government introduced the bill with the aim of reducing the number of people smoking and the related harmful effects. The bill also prevents the advertising and promotion of tobacco products on the products packaging with other aims of; Minimizing the appealing looks of tobacco products to customers most the youths. Minimizing the ability of the messages contained in the packages from misleading people of the harmful effects of tobacco Increasing the health warning on the products packaging Reducing the number of tobacco products sold in Australia. The bill additionally bans the trademarks from being displayed on the tobacco package hence preventing such trademarks from being used as design feature to divert attention away from the warnings. The legislation was to be fully constituted by the January 2012 but due to delays in the court, the bill is not at work. Packaging in business is viewed as the one of the paramount tools in marketing for the product. Therefore, the bill as it is will affect the marketing strategies for tobacco products not mentioning other products as may be case. The concept of marketing mix as conceived by Professor Neil Borden of the Harvard Business School it differentiates brands which is an important element in bringing together the customer. For example, more recently several countries have banned the open display of tobacco products in retail places. These nations have realized that what appears on the display of the tobacco products affects the usage of the same product. In this respect, the highly visible and eye-catching displays on tobacco products and other such substances with harmful effects to consumers were banned and alternative packaging proposed. Such displays were believe to cause unfortunate spill of promotional such as frequent remainder of the product to vulnerable consumers like young stars and former smokers as well as smokers who are trying to quit the habit. Due to the notion of point of sale removal, tobacco companies mostly BATA and Philip Morris have a feeling that in the recent future pack designs will in-turn shape the imagery brand (AG 2010, pp. 1). This is unless the Australian government calls for other packaging proposal. The bill has made tobacco industries to change their promotional strategies as well as packaging. Say, when research was done; researchers realized that BATA has introduced Dunhill packs easily shareable between two different smokers who could not afford a full pack. In addition, the two shared packs did not have any graphic health warning. Furthermore, the harmfulness as per the content of the tar was displayed together with other health warning in a qualitative manner. Finally, the industry changed the packaging and developed a colour coded packaging. The research done after the changes concluded that the new packaging also are appealing to the customers and still they can recognize the pack with ease. The first idea of plain packaging was initiated in Canada in 1980s after the tobacco control group of the country advised the government to legally ban advertisement and change the packaging for the sake of the Canadian young population. This happened at the time when it was difficult to discriminate between packaging and brands hence it did not go through. The proposal to ban tobacco advertisement and plain packaging has been put before parliaments of several governments without much success (Beede & Lawson 1992, pp. 322). In November of 2011 in UK Health secretary passed a policy suggesting that government check whether plain packaging would be an effective way to minimize smoking for young teens and to help those who are already in it. In England, the government is still trying to relate between the two and see whether there is any substantial effect on the reduction of deaths and number of smokers every year. Other countries like New Zealand are closely monitoring the outcome of the Australian case so that they can implement the same policy to their own system. Finally, Belgium Health Minister stated in the parliament that with plain packaging on tobacco products, only the display brand name would form the standard format. The effects of such labeling will reduce the attractiveness and hence increase the impact of health warning information. Argument With this prior knowledge about the bill and its intended effects, one would argue that the legislation is good for the governments and the people in the habit of smoking but very depressing to the industries manufacturing such goods. To start with as supported by argument about the IP, the bill will have breached the international argument on intellectual property of the products and the companies as a whole. The duty of every government is to protect its industries and their intellectual property but on this case the government is going against the obligations. This will serve as a loophole for government to take the IPs of industries without proper compensations hence other investors from other countries will not invest in such a country in fear of IP robbery by the host country’s government without compensations. On the other hand, the indigenous industries will have no trust with their own government on such issues hence will not run to the best of their ability. In regard to trademarks, industries will be force to give out their trademarks to other investors in the fear of the same. As per the section 51 of the Australian constitution, the parliament will be acting within its limits to protect its citizens against harmful products (Beede, Lawson & Shephard 1990, pp. 18). The retailer’s argument about the reduced sale of the products hence incurring losing will also affect relationship between the government and the business owners if the bill is passed. The above argues are supported by the idea that the parliament will be acting on a trial and error method since the effectiveness of the policy is not yet proved. Arguing from result obtained about the effectiveness of the bill, the parliament stand a chance of winning the case on the plain packaging. For example, the so known Marlboro study, the New Zealand study, Australian study and university of Toronto study all indicate that there is a great significant between the plain packaging and the use of tobacco products. Hence making tobacco products less attractive and reducing the number of smokers glued to the habit. In particular, Canadian study was to investigate the potential impact of genetic packaging which is aimed at reducing the cigarette uptake. The Australian high court has to rely on these studies for them to convince BATA and other such companies about the policy if they have to fully constitute the legislations. On the same point, tobacco industries not only within Australia have to understand that the bill is necessary and it will not only affect tobacco companies but all companies that deal in such sensitive products. So, it is within the government’s mandate to constitute such bill and they are not unconstitutionally acting as BATA is claiming. Arguing from the sociology of smoking, the smokers have not limitation to the attractiveness of the packaging ones they are addicted. Thus, whether or not the bill will be passed it will not have any effects to people already in the habit. The only substantial effects will be no new smokers will get into the habit. Going back to the Australian government’s stand about the bill, genetic packaging will make customers to be responsible consumers of the tobacco products since the warning and the unattractiveness of the packaging will make them less glued to the products. Hence packaging is both vital to the business owners and the government with the aims of protecting its citizens. More so, studies have indicated that cigarette brands and cigarette packaging design give meaning to personal traits, social identity and finally position in hierarchies of status. With this in mind, the young smokers tend to account and brand seem to appear as if it add an extra dimension to the social meaning in their day-to-day life. Therefore, depending on the market i.e. marketing mix such as packaging, image protection is vital for addiction since it will make mostly the young stars to be glued to smoking with the irrational thinking that it will help them raise their social radar. This idea does not close well with tobacco industries since it will mean that they have to put down their tools of work and look for other business to do. Alternatively, they will be forced by the constitution to narrow their businesses only to service those who are already in the habit without making other non-users addicts (Beede & Lawson 1992, pp. 320). By so doing, it will mean that the number of personnel employed by such companies will has to go down and consequently the level of unemployment have to rise in such countries were such bill have been enacted. The Australian government will be acting to challenge its own moves to reduce the level of unemployment within the country. Free trade calls for business without governments interventions, thus if such trades are allowed to thrived within countries some citizen from say undeveloped or developing countries will severe on the expense of other rich countries who are out there to transact business with no good intensions. For that reason, government has to act to protect its people since they are the one who elected them to power for proper democracy to thrive. Moreover, the bill will call for little substance because of exclusions concerning products injuries to health (Beede, Lawson & Shephard 1990, pp. 27). The Australian high court has also to consider the fact that the bill has been tried in other countries but it has failed terribly and that many countries are closely following this case. The court must be very clear with any move and decision they make since some of the countries following the proceeding may be against their decision hence support the BATA and other such companies though Australia is a sovereign country. This idea is true because, the legislation has been tried in other countries and failed hence the Australia one cannot be an exemption. Conclusion In conclusion, the case stands at 50-50 chances of winning either side. One, going with the fact that the bill will affect and breach more than one obligation as stated above, the case will highly depend on the high court finds and other supporting details to facilitate the enactment. Secondly, the finding from studies from Australia and other countries clearly indicate that the case may be won by the parliament since there is a great correlation between the packaging of tobacco products and consumption. In addition, the fact that the parliament is acting on the larger population’s good may make it win the case (Eindhoven 1999, pp. 34). On the side of British American Tobacco Australia, they stand a chance of winning the case if and only if they convince the judge that the effectiveness of the bill are not yet proved and that companies (not only tobacco companies) stands a chance of losing their intellectual property to the same government that is supposed to protect them and that, after the loss; they stand no chance of getting a compensation and if they get one it can’t fully compensate for the losses incurred. Finally the BATA has to make the court understand that the bill has other unconstitutional issues relating to trademarks, intellectual property and business integrity for them to have an upper hand of winning the case. References Anon 2004. Conjuring pack appeal: World Tobacco. Vol.200, pp. 35−40 Australian Government. 2010. Taking preventative action: Government's response to Australia: the healthiest country by Canberra: Department of Health and Ageing. [Online] at: http://yourhealth.gov.au/internet/yourhealth/publishing.nsf/Content/report‐preventativehealthcare retrieved on 3rd May 2012 Beede, P & Lawson, R. 1992.The effect of plain packages on the perception of cigarette health warnings: Public Health. Vol.106 (4), pp. 315–322. Beede, P., Lawson, R. & Shephard, M.1990. The promotional impact of cigarette packaging: a study of adolescent responses to cigarette plain‐packs. ANZAME. Launceston, Australia: University of Otago. [Online] at: http://legacy.library.ucsf.edu/tid/enu22e00/pdf retrieved on 4th May 2012 Eindhoven, G. 1999. Elegant packs promote image, defend property rights. World Tobacco Vol. 170, pp.16−189 Zimmel, S. 2003. Graphic expansion of pack printing: World Tobacco. Vol. 194, pp.39 Read More