DUBLIN, Ireland – Ireland, ground zero in the battle against smoking, and the United Kingdom are firing the first shots in Europe’s latest war on tobacco, one that may ultimately end up being fought by lawyers.
Cigarettes will be sold in unbranded, olive green packets dominated by graphic images of damaged lungs after Ireland last week became the first in Europe to require plain packaging, meaning the end of colors associated with brands like Philip Morris International Inc.’s Marlboro.
With the U.K. racing to follow Ireland’s lead, four of the world’s biggest tobacco companies are already preparing to take legal action. The outcome may decide the fate of packaging in the European Union, threatening a $780 billion industry already grappling with falling smoking rates.
“I have a message for the tobacco industry,” said James Reilly, the Irish minister behind the legislation. “They come to pursue us, but they must understand, we will win. … They may have billions behind them, but we have the truth and the people on our side.”
Doubling health warning
Within two years, cigarette boxes in Ireland will be standardized, with the health warning doubled to 65 percent of the surface area. Ireland is following the example of Australia, the first country in the world to make such a move.
In 2012, Australia stopped tobacco companies using brand logos, colors or promotional text on their packaging. While that law is still under challenge at the World Trade Organization, the initiatives in Dublin and London, the first under a new E.U.-wide tobacco directive, will set the precedent for Europe.
On Monday in London, the House of Lords is scheduled to vote on standardized tobacco packaging legislation, after lawmakers in the House of Commons backed the plan.
Tobacco companies said they would challenge the U.K. law scheduled to take effect next year.
P.J. Carroll, Ireland’s oldest tobacco firm, said that the legislation amounted to the Irish government illegally taking property from companies without compensation.
Japan Tobacco Inc., the second-biggest tobacco company in Europe, is among the companies threatening court action. The others are Philip Morris and Imperial Tobacco.
“Plain packaging is a disproportionate, unjustified and unlawful measure and there is no credible evidence to suggest it will result in public health benefits,” Japan Tobacco said in a statement.
Ireland has a history of setting the tone on tobacco regulation. In 2004, the nation banned smoking in bars and restaurants, a move widely followed in Europe and the U.S.
Slight decline in smoking
About 23 percent of Irish adults smoke, down from 25 percent in 2009, though above the global rate of 20 percent.
“Plain packaging is the biggest single threat to the cigarette industry, especially if it spreads into emerging markets,” said Kenneth Shea, an analyst at Bloomberg Intelligence in New York. “Removing brand imagery differentiation like the Marlboro Man, for example, severely reduces producer pricing power.”
It isn’t just tobacco companies that are worried. “We have concerns about the impact of introducing a plain packaging policy for cigarettes on the U.K.’s global reputation for intellectual property,” said John Cridland, of the Confederation of British Industry. “Customers identify with brands, so companies are understandably uneasy at the prospect of a key part of their identity being undermined.”