Big Tobacco on the warpath against plain packaging in New Zealand

There’s a broad base of public support for government action against smoking in New Zealand. Barbara Walton/AAP

The tobacco industry has launched an advertising campaign against the New Zealand government’s proposal to introduce plain packaging of tobacco products. According to the media campaign, plain packaging will simultaneously decrease government revenue and increase youth smoking uptake.

The industry’s arguments are the same as those broadcast in Australia: plain packaging will infringe its intellectual property rights, expand the black market in tobacco, jeopardise foreign trade and drive down prices. But it seems the the government isn’t persuaded by these arguments.

Minister of Health Tony Ryall was blunt. “British American Tobacco is wasting its money”, he said. According to Ryall, tobacco companies have little credibility these days, and anyway there is a broad base of public support for government action to cut smoking rates.

Still, the legislation to implement plain packaging is not certain. The government has agreed in principle, and has published documents that describe in detail the rationale for introducing plain packaging of tobacco products. But senior members of the government signal caution.

Softly, softly

Prime Minister John Key says “There is a lot of things we need to consider - I wouldn’t say it’s a slam dunk by any chance that plain packaging would take place.”

It’s not pubic opinion that’s holding them back. Ryall is right – on the whole, New Zealanders distrust the tobacco industry and support strong action against smoking. Instead, it’s the international reaction to plain packaging that worries Key, Ryall and colleagues. Specifically, what challenges the country might face under existing trade laws, and how a move to plain packaging might complicate agreements now under negotiation.

There is reason to be cautious, according to Jane Kelsey, professor of law at the University of Auckland. Kelsey warns that the industry is likely to use a number of devices to obstruct radical restrictions on the supply of tobacco.

There are several routes by which cases could be brought to the World Trade Organization, along the lines of those lodged by the Ukraine and Honduras in objection to Australia’s proposal for plain packaging. (Note that New Zealand’s moral authority in health and trade matters has been somewhat compromised by the objections it raised last year against Thailand’s declared intention to introduce graphic warning labels on alcohol. But then, so has Australia’s.)

Dangers in the TPPA

In some respects, New Zealand may be less vulnerable than Australia – the country has signed few investor agreements that permit enforcement against domestic policy. But this would change if New Zealand agreed to investor-state enforcement powers under a Trans Pacific Partnership Agreement (TPPA).

Key and his colleagues have high hopes for the TPPA, but the arrival of the United States relatively late in the process has raised the risks considerably. The United States is pushing for stronger intellectual property and other investor protection conditions as part of the TPPA, and if these are included, the tobacco industry will be in a much stronger position to challenge policies such as plain packaging.

As Kelsey and others have pointed out, the threat of action may be sufficient to discourage governments, given the high costs of defending a national position, and how difficult it is to predict the outcomes from investment tribunals.

The high road

But let’s not forget the bigger picture on tobacco. In New Zealand, we have a conservative government – not enamoured of regulation – that has raised tobacco taxes substantially (smokers are likely to be paying at least $1 a cigarette by 2016) and banned point of sale displays. With a strong nudge from its Maori Party coalition partners, the government has signed up to making the country smoke-free by 2025.

Will we get there? Smoking statistics are pointing in the right direction – unpublished data for the second half of 2011 show that the proportion of the population smoking every day is down to 16%, a fall of two percentage points in five years. But the trends are not strong enough, even if “smoke-free” is loosely interpreted as a smoking prevalence of under 5%.

This is the importance of plain packaging: it is a test of government commitment to tighten the screws on supply, to continue the shift from viewing tobacco as a consumer commodity to treating it as a hazardous substance, and to balance the virtues of global trade against what is needed for health protection at home.