Who: French Health Ministry
When: October 2015
France has a long history of regulations affecting cigarette packaging. A first act, called the “Veil Act” was encated on July 9, 1976. It stated that cigarette packaging must mention that smoking abusively is dangerous. On July 2005 (act of the 16th of July), this statement was replaced by the warnings “smoking kills” or “smoking seriously harms you and others around you”. Finally, a ministerial decree dated April 20, 2010 imposed shocking and deterrent images on cigarette packaging. Those pictures have to cover 40 % of the back of packaging.
Now France is set to go one step further by Implementing brandless cigarette packaging. Such measure is part of a wider national program to reduce smoking in France which is built around three areas of focus : protect the youth of France and prevent them from starting smoking, help people to stop smoking and take actions regarding the tobacco economy. Implementing brandless cigarette packaging would serve the purpose of protecting youth.
Brandless cigarettes were first introduced by the World Health Organization Framework Convention on Tobacco Control, ratified by France in October 2004. This convention encourages member states to adopt brandless packaging for cigarettes in its articles 11 and 13. Pursuant to this convention, a bill was introduced to the French Council of Ministers on the 25th September 2014, by Marisol Tourraine, the French Minister of Social Affairs and Health. This bill will be reviewed by the French Parliament i 2015. The government objectives are to reduce the number of smokers by 10% within 5 years and ensure that 95% of young people will not smoke within 20 years.
This measure should come into effect in 2016.
Should the measure be enacted, the packaging would have to be neutral and standardized : all packages would have the same colour, size, typeface. The brand would still be there but limited to simple writing, with a limited size and always at the same location on the packaging. There will be no brand logo. As from the 20th of May 2016, free areas on the package will be used for warnings and shocking pictures: it will cover 65% of the packaging against 40% currently.
This measure raised heavy concerns from tobacco producers who have already announced that they will sue the state of France. They consider that these measures would violate their intellectual property rights and more precisely their brand rights. Moreover, they argue that it will be easier to infringe brandless cigarettes.
Two kind of actions could be brought against France: claims from state producers and from private producers.
Firstly, states that produce tobacco could bring a claim in front of the Dispute Settlement Body of the World Trade Organisation, arguing that France does not respect some of its trade obligations deriving from international treaties. France could be forced to waive its legislation (should such legislation be enacted) or, if it does not do so, would be liable for heavy trade sanctions. In fact, such a claim has already been brought by five member states tobacco producers (Indonesia, Ukraine, Dominican Republic, Cuba and Honduras) against Australia (which was the first state to implement the brandless cigarettes rule in 2012). The Dispute Settlement Body should deliver a decision in a few months.
Then, foreign companies that sell cigarettes in France could bring a claim against France in front of the International Centre for Settlement of Investment Disputes (CIRDI), which is also an arbitration institution, if their country of origin has entered into a bilateral investment treaty with France. In those treaties, states oblige themselves to respect and protect investments made by the nationals of the counterpart country. If a business considers that a state violates its obligations under the treaty, it can bring a claim in front of the CIRDI. In fact, the brand right is considered as an investment to be protected under those treaties. Philip Morris (Malboro founder) has already brought a claim in front of the CIRDI against Australia.
Other notable provisions of the proposed bill concern advertising for electronic cigarette matter as the bill first limits, then will prohibit (as from the 20th of May, 2016) advertising for electronic cigarettes, except for in-store advertising and for advertisements in tobacco professional papers.
Why this matters:
This bill is quite important as this would reinforce the French law tobacco prevention package. Then, it could give rise to some interesting examples of arbitration in the matter of Intellectual property, in front of the World Trade Organization, and, which is more uncommon, in front of the International Centre for Settlement of Investment Disputes.