31 May 2016
1. The issue: Tobacco plain packaging proposal
South Africa is considering the introduction of plain packaging for tobacco products
as part of implementing the World
Health Organisation’s (WHO) guidelines on tobacco product packaging and labeling.
The aim is to
reduce the use of tobacco products especially amongst young people.
So far Australia
is the only country to introduce plain packaging. France
will follow in 2016 and the UK,
Norway and Ireland plan to implement similar
measures in 2017.
Meanwhile the Netherlands
has been relaxing its tobacco control regulations on the grounds that it is
patronising and illiberal to dictate health choices to citizens.
The FMF position mirrors
People have a fundamental
right to enjoy life. How much risk is a reasonable trade-off for personal
happiness is not a choice that ought to be made by a government bureaucrat on a
Plain packaging is the subject of a dispute at the World
Trade Organization brought by four countries, alleging a breach of intellectual
property rules (IPW, WTO/TRIPS, 25 February 2015).
Australia faces a legal bill of $50m and rising to
defend its plain packaging legislation; other countries could be facing legal
claims of US$ billions for deprivation of property IP rights.
2. What is plain packaging?
Plain cigarette packaging, also known as generic,
standardised or homogeneous packaging, refers to
packaging that requires the removal of all branding (colours, imagery,
corporate logos and trademarks), permitting
manufacturers to print only the brand name in a mandated size, font and place
on the pack, in addition to the health warnings and any
other legally mandated information such as toxic constituents and tax-paid
stamps. The appearance of all tobacco packs is standardised, including the
colour of the pack.
packaging may be used with Graphic
Health Warnings (GHW) which show gruesome images of potential side effects of
smoking. This is the Australian example.
3. SIX good reasons why South Africans should
Plain packaging violates:
Individual freedom of
Potentially violates the
international agreement on Trade-Related Aspects of Intellectual Property
Is a further step
towards the rise of the nanny state by stealth
What’s next on the
agenda after tobacco? SA on a slippery slope with alcohol, sugar, salt, fat and
more on the agenda
freedom of choice
against draconian anti-smoking legislation, including the latest proposals for
plain packaging, is part of the war against intolerance and excessive
government intervention in our daily lives.
continues to highlight the increasingly intrusive nature of government in the
lives of private individuals.
The Department of
Health (DoH) says the measures are intended to protect the nation’s health
which is a fine and reasonable principle.
health is not the only factor at play in individual happiness. Should we allow politicians to decide for
each of us that one factor is preferable to another?
individuals we may decide that the pleasure derived from smoking is worth the
health risk. Very few consumers can be unaware of the risks of cancer and other
diseases from tar inhaled from tobacco products. However, that informed
decision, to smoke in the face of medical evidence, is one that only we as
individuals can and should make. That choice is a freedom and one which once
given up, is very hard to regain.
accept the health risks associated with smoking. It is the government’s job to
educate and remind us and to provide the latest research data.
b. Consumer rights
Consumers have a right to
know about new products and to be able to identify different products and
brands. Plain packaging effectively leaves the consumer “blind” and unable to
differentiate between one brand and another.
c. Business rights
South Africa, like many countries, has already banned all
forms of advertising of tobacco products to the public. However, this kind of
legislation will be a first in regulating the form in which the products are
packaged and sold to the public and will have a serious impact on Trade Marks
(TM) and brand value.
Effect on start ups
Without the ability to
market new products through advertising, branding, colour and graphics, the
effect will be to keep all new entrants out of the market thus protecting and
entrenching existing larger firms.
Plain packaging regulations and the effects on
trade mark rights
Plain Packaging makes
copying and the introduction of counterfeit products easier and less obvious.
IPR holders will face even more difficulty in protecting their rights.
purposes, a TM must be capable of distinguishing the products from others in
the market. Often simple TMs struggle to overcome this hurdle and applicants
get over it by adding visual elements and colour to add a distinct look to make
the product easily recognizable.
diminishes brand recognition. A competitor could apply to have the TM removed
from the record.
Plain packaging and brand
Tobacco companies like
all major businesses invest in their brands and brand value has a place on the
balance sheet. If the effect of plain packaging is to diminish this value, this
has the effect of expropriation of an asset without compensation.
The SA government does
not appear to have foreseen the possible legal
challenges ahead. Australia's legal bill for defending its cigarette plain packaging legislation is
set to hit $50 million as it battles to contain a case before a tribunal
in Hong Kong.
Retailers and suppliers will carry the responsibility –
and consumers the costs
If SA follows the Australian model, then
retailers and suppliers will be liable to ensure that all tobacco products
comply with the requirements of the legislation or face a fine and / or
criminal charge. This extends to imported cigarettes from sources where plain
packaging is not mandatory.
Again, the consumer
will carry any costs associated with compliance with plain packaging.
d. Potentially violates the international agreement
on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
The four countries (Dominican Republic, Cuba,
Honduras and Indonesia) that
have initiated disputes at the WTO repeatedly requested at the WTO Council of
the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
that countries interested in plain packaging should wait for the outcome of the
dispute at the WTO before engaging further in their legislative process.
The Dominican Republic in a statement
made at the TRIPS Council in February said, “By stripping all design elements
from tobacco packaging and standardizing other packaging features, plain
packaging measures undermine the basic features of trademarks and geographical
indications (“GIs”) as protected under the TRIPS Agreement.”
The country also
challenged the positive effect of plain packaging on smoking, arguing that in
Australia where packaging does not distinguish brands but prices still vary,
consumers have shifted to cheaper low-end licit and illicit tobacco products.
e. Is a further step towards the rise of the
nanny state by stealth
“Why do kids need nannies? Because there are
certain things which they can’t do for themselves. They need someone to take
care of them. We are playing that role…” Aaron Motsoaledi, Minister of
Do we really want politicians deciding what is and isn’t in our best
interests in our private lives?
Minister Motsoaledi has also declared war on alcohol, salt, sugar, fat,
fast food, baby formula and anything else that might under some circumstances
be described as unhealthy, or less healthy than alternatives.
Motsoaledi is building the path towards nanny-state fascism and has
started with tobacco products. Once the precedent is set, he can do this with
anything, on almost any grounds.
It is not the DOH’s role to make that choice for us by taking away
factors which play a part in forming individual decisions.
In a free society, freedom of choice and market forces are equally
The Nanny State is not yet with us – but is hovering on the horizon while
SA sleep walks towards it by allowing politicians to take away the right and
ability for individuals to think for themselves, to assess the information and
to make personal lifestyle choices.
However, the nanny state problem is not confined to just puritanism and
prohibition, it is much larger.
If we persist in thinking people cannot make simple decisions about what
to eat, when to drink or what games to play, why then do we think they can
do something as complicated as choosing between different political visions? If
people are so stupid, should they even be allowed to vote?
There is a serious contradiction in supporting individual choice in the
political sphere but not in the commercial sphere.
The government might think they know better than we do what's best for
us, but they don't.
next on the agenda after tobacco? Slippery slope…
and visuals on cars showing mangled bodies, blood and gore?
diseased livers on wine bottles?
Burst arteries on
red meat packaging?
Mounds of quivering
flesh on chocolate bars?
Rotting teeth on
cans of fizzy, sugary cool drinks?
Broken limbs and
dead bodies on dangerous sports equipment?
Far fetched? No, merely the logical conclusion of plain packaging with
graphic health warnings.
culture which is being encouraged and developed by the state is profoundly
worrying because it discriminates against a significant minority of the
population. What next? Whose craving and pleasure will be the next target? Fat
people? Those who like a drink after work? That’s already happening.
The Minister of Health
may decide certain individuals are too fat and need to take compulsory
exercise, perhaps at the weekend. Perhaps those with high blood pressure and
heart disease will be prohibited from attending braais to curb their intake of
This further example of
legislation to curb individual choice and behaviour together with the DTI’s
proposed liquor policy should alarm South Africans who care about individual
liberty and freedom and fill us with foreboding.
of before and after plain packaging
Today’s pack of cigarettes
Is this what your next
Valentine’s Day gift
will look like?
Is this what you will offer
your daughter as a
Is this the bottle of wine
you will gaze lovingly over
into the eyes of
more information and to arrange for photographs and interviews, contact:
FMF is an independent, non-profit, public benefit organisation, created in 1975
by pro-free market business and civil society national bodies to work for a
non-racial, free and prosperous South Africa. As a policy organisation it
promotes sound economic policies and the principles of good law. As a think
tank it seeks and puts forward solutions to some of the country’s most pressing
problems: unemployment, poverty, growth, education, health care, electricity
supply, and more. The FMF was instrumental in the post-apartheid negotiations
and directly influenced the Constitutional Commission to include the property
rights clause: a critical cornerstone of economic freedom.
FMF has a wealth of information in papers, articles and opinion pieces
available on the website which can influence the public debate and present
alternative policies to the people of South Africa. Please look at our website www.freemarketfoundation.com.
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