After Australia, the U.S., Canada and Great Britain, New
Zealand has now raised its voice against smoking.
New Zealand has announced that it will pass a law regarding the
use of plain packaging of cigarettes by tobacco companies.
However, the government will delay the implementation of the law
until it sees the verdict in the Australian case.
In 2011, the Australian government proposed a ban on attractive
Under the proposed laws of Australia there is a restriction on
logos, branding, colors and promotional text on tobacco packets.
Further, the packing was to carry health warnings and pictures of
diseased body parts, with the company's logos and the cigarette
brand names relegated to the bottom of the packages in smaller
print and against a dull background.
After facing much opposition within Australia, the bill was
passed in December 2012, and cigarette packets in the country now
include warnings and photos of a gangrenous limb and a cancer
victim. However, the law is being challenged at the World Trade
Organization and the legal proceedings are underway.
The New Zealand ruling will also see opposition. According to The
New Zealand Association of Convenience Stores, in a public
consultation process that ended Oct. 5, 2012, the majority of
participants opposed the idea of plain packaging.
The ruling was inspired by The World Health Organization which
had pleaded that countries consider the plain packaging norm.
The move was vehemently opposed by tobacco sellers like
Philip Morris International Inc.
British American Tobacco Plc.
), as tobacco companies are increasingly relying on their
packaging to build brand loyalty and grab consumer attention.
Packaging was the last resort for tobacco advertising after
the government curbed advertising in magazines, billboards and
Philip Morris, with a 37% market share in Australia for its
brands including Marlboro and Alpine, chose to challenge the
Aussie legislation with a lawsuit at the country's High Court.
The ruling also supposedly violates an investment treaty with
Hong Kong, which holds the government responsible for protecting
Hong Kong investments in Australia.
British American Tobacco whose brands include Winfield, Dunhill
and Benson & Hedges, has announced that government plans
would infringe upon international trademark and intellectual
property laws and has also raised the possibility of pursuing
Tobacco companies are resorting to cigarette alternatives that
espouse reduction of the harmful effects of tobacco. In May 2011,
Philip Morris bought the patent and global rights to an aerosol
nicotine-delivery system for delivery of nicotine to lungs
without cigarette smoking.
British American Tobacco also created a subsidiary called
Nicoventures, which focused on nicotine alternatives. In 2009,
Reynolds American Inc.
) purchased Swedish company Niconovum, whose nicotine gum,
pouches and spray help people give up smoking.
While Philip Morris and Reynolds American currently carry a Zacks
Rank #3 (Hold), British American Tobacco holds a Zacks Rank #4
BRITISH AM TOB (BTI): Free Stock Analysis
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PHILIP MORRIS (PM): Free Stock Analysis
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