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Philip Morris on Australian Plain Packaging for Tobacco

Philip Morris Limited Comments on Australian High Court Decision on Plain Packaging for Tobacco Products

The Australian High Court today ruled in favor of the government in the challenges brought by tobacco companies finding that the plain packaging legislation did not violate the Australian Constitution. The key issue before the court was whether, under the Constitution, plain packaging is an 'acquisition of property', which includes a corresponding benefit to the government.

The court today announced its ruling but has not yet published its opinion on the case.

Commenting on today's ruling, PML spokesperson Chris Argent said, "We will have to wait to read the court's opinion to fully assess today's decision. Regardless, the legality of plain packaging, including whether Australia will have to pay substantial compensation to Philip Morris Asia, remains at issue and will be considered in other ongoing legal challenges."

Three countries have already challenged Australia before the World Trade Organization (WTO) over the plain packaging legislation as contrary to Australia's obligations as a WTO member. Philip Morris Asia (PMA) is also suing Australia for multiple breaches of its Bilateral Investment Treaty (BIT) with Hong Kong. The company expects decisions in these cases within two to three years. In broad terms, the WTO and BIT challenges will examine a number of issues, including:

• Whether there is any reliable evidence that plain packaging will be effective at reducing smoking rates
• Whether there are effective, less restrictive alternatives that Australia could have implemented instead
• Whether plain packaging breaches Australia's international trade and treaty obligations
• Whether the Australian government will need to pay compensation to PMA

Today's High Court ruling has no legal bearing on these international cases or on other jurisdictions.

"We believe that Philip Morris Asia's investment treaty case and the WTO challenges are strong. As such, there is still a long way to go before all the legal questions about plain packaging are fully explored and answered." added PML spokesperson Chris Argent.

As of 1 December 2012, all tobacco products sold at retail must be in plain packaging.

About Philip Morris International Inc. (PMI)

Philip Morris International Inc. (PMI) is the leading international tobacco company, with seven of the world's top 15 international brands, including Marlboro, the number one cigarette brand worldwide. PMI's products are sold in approximately 180 countries. In 2011, the company held an estimated 16.0% share of the total international cigarette market outside of the U.S., or 28.1% excluding the People's Republic of China and the U.S. For more information, see www.pmi.com.

About Philip Morris Limited (PML)

Philip Morris Limited (PML) began operations in Australia in 1954 and has approximately 700 employees. Based in Melbourne, the company manufactures and sells a number of well-known brands, including Marlboro, Alpine, Longbeach, Peter Jackson, choice and GT. In 2011, PML held an estimated 37.5% share of the Australian cigarette market.

ENDS

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