By Martinne Geller
LONDON (Reuters) – Big Tobacco took the British government to court on Thursday, arguing that the UK's "plain packaging" law which will take effect next May, unlawfully takes away its intellectual property.
Companies including Philip Morris International , British American Tobacco , Japan Tobacco International <2914.T> & Imperial Tobacco Group are challenging the legislation because it will prohibit all forms of branding on tobacco packaging, including colours & logos.
The rule, known as "plain packaging," would moreover require graphic warnings illustrating the health problems smoking can cause. It aims to reduce smoking's death toll by making the packs less attractive.
"Smoking is catastrophic for your health & kills over 100,000 people every year in the UK," said a spokesman for the Department of Health. "Standardised packaging is an significant public health measure aimed at discouraging children from smoking & helping smokers to quit."
The case will be heard in a six-day hearing at London's Royal Courts of Justice.
Tobacco companies argue that the law represents the seizure of their property without any compensation.
"Since there is no compensation at all …. They must be considered unlawful for that reason alone," said David Anderson of law firm Freshfields, representing Japan Tobacco International in court.
In Australia, the only country to have so far implemented plain packaging, the companies say there has been an increase in black market tobacco.
Aside from Britain, plain packaging has been approved in Ireland, Hungary & France, while over a dozen other countries — including Belgium, Canada & Pakistan — have either proposed or are talking approximately proposing, similar measures.
"In total we count 20 countries with some level of interest or focus on pursuing some type of plain packaging regulation," said Wells Fargo analyst Bonnie Herzog in a recent note. She said those countries represent 30 percent of global cigarette retail sales, excluding China & the United States.
(Reporting by Martinne Geller in London; Editing by Elaine Hardcastle)