CANBERRA (Reuters) - Australia will force tobacco companies to adopt plain packaging, removing all color and branding logos within two years, in a world-first move aimed at reducing smoking-related deaths, government sources said.
Laws to be in force by January 2012 will prohibit tobacco companies from using any tobacco industry images and promotional text, as recommended by the World Health Organization, the center-left government will announce later on Wednesday.
The government believed the move, expected to be confirmed by Health Minister Nicola Roxon, would reduce the attractiveness of tobacco packaging and its potential to mislead particularly young people.
The government will face voters later this year in an election set to be dominated by health issues after Prime Minister Kevin Rudd struck a deal with state leaders earlier this month to take funding control of health and state-run hospitals.
Rudd holds a solid lead in opinion polls and is favoured to win a second term at elections likely in October.
The Australian tobacco market generated total revenues of A$8.3 billion ($7.60 billion) in 2008, recording growth rate of 2.9 percent between that year and 2004.
Smoking-related illnesses killed over 15,000 Australians each year and smoking has been identified by health authorities as the largest preventable cause of disease and death in the country.
Research has shown that industry branding and packaging design reduced the effectiveness of graphic health warnings about smoking.
The World Health Organization, in its Framework Convention on Tobacco Control, advises authorities to “consider adopting measures to restrict or prohibit the use of logos, colors, brand images or promotional information.”
Tough government regulations on tobacco advertising have reduced smoking in Australia from 30.5 percent of the population aged 14 and over in 1988 to 16.6 percent in 2007. The government is aiming to cut smoking rates below 10 percent by 2018.
Free market think-tank The Institute of Public Affairs recently warned that the move to force tobacco companies to sell their products in plain packages could lead to compensation claims of more than A$3 billion a year.
Forcing tobacco companies to strip products of trademarks was akin to compulsory acquisition of physical property and could require compensation under the Constitution, it warned.
“$A3.4 billion dollars taken from general taxpayer revenue to go toward funding to tobacco companies is morally offensive,” the institute’s Intellectual Property and Free Trade Unit director Tim Wilson told Australian radio.
$1=1.092 Australian Dollars Reporting by Rob Taylor; Editing by Sanjeev Miglani