The threat by Japan Tobacco Group to promptly sue the Government over draft laws to ban branded tobacco packaging stands as a blatant intrusion into Ireland’s political process in the interests of its own profit.
The business, which owns the Benson & Hedges and Silk Cut brands, could have waited for the Oireachtas to enact the law before proceeding to the Four Courts with an action to vindicate its intellectual and other property rights.
Instead, the firm’s Irish unit sent unambiguous missives to Ministers James Reilly and Leo Varadkar in which it purported to instruct them to stop the legislation in its tracks within 10 days or face a High Court claim for damages. As if to maintain some kind of decorum as hostilities intensify, the threat was copied to Taoiseach Enda Kenny.
Although “Big Tobacco” is united in its clamour to force the Government to scrap the draft law, Japan Tobacco’s intervention in advance of a committee-stage Dáil debate on Tuesday on the Public Health (Standardised Packaging of Tobacco) Bill is said to have left rival tobacco groups cold.
The explanation lies in the fact that the abrupt demand for immediate undertakings from a sovereign government in respect of legislation currently before parliament looks gauche.
The legal démarche is also perceived in the tobacco world to have handed an open goal to their opponents. This was duly seized on Minster for Children and plain packaging champion James Reilly, who declared the Government would not be pushed off course to protect tobacco profits.
Japan Tobacco’s manoeuvre all but confirms the inevitability of action in the High Court. By challenging the Government’s very right to proceed with legislation of this nature, the firm is perceived to be angling for a pre-enactment injunction to halt the law on the basis that it would have an unknown or unquantifiable impact on its business.
This avenue may be open to Japan Tobacco as it does not operate in Australia, location of the world’s first plain packaging regime. Such a route would be barred to the Irish operations of rival groups, as they are present in Australia.
The rivals, however, are not waiting silently in the wings. Just as Japan Tobacco has been wielding its big stick at the Government, the John Player company circulated literature in recent days in which it claims Australian data shows smoking rates in the 12-17 age cohort rose 32 per cent since plain packaging was introduced there in 2012.
If Japan Tobacco does not succeed in blocking enactment of the law on grounds of national legal competence vis-à-vis European directives, then further High Court claims would be likely on the substance of the legislation. A number of firms have threatened action on these grounds.
The bottom line remains that Reilly’s plain-packaging regime might yet be the first in the EU, thereby setting a precedent to be followed by other big member states whose tobacco markets are much larger than Ireland’s.
This explains its relevance for the global tobacco industry. It was not for nothing that six major US business lobbies brought their concerns directly to Kenny last year and that support has been reeled in from dozens of other national lobbies all around the world. Note, too, that domestic retailers have inundated certain Government TDs with correspondence against the ban.
All of that might have caused some degree of discomfort for the Government, notwithstanding the laudable health objectives behind the campaign to cut the number of child smokers. Thus, moves by the British government last month to advance plain packaging suggest that Ireland will not be the only target on this front for the global lobby. Informed observers believe the question will ultimately end up in the European courts.
Some tobacco firms have advice to say there are precedents under which the infringement of an intellectual property right could be deemed legally watertight. In question then is whether the courts would mandate the payment of compensation by governments.
