Thursday 24 July 2014 11:04 am

Mars lawyers slam tobacco plain packaging

Lawyers for confectioner Mars have warned that plain packaging for tobacco could have a major impact on other products to the detriment of consumers, according betterRetailing.

Should the government proceed with plans to introduce plain packaging, it could lead to brand names being put into plain type, as well as certain colours and shapes being removed from product packaging.

Mars argued that these types of branding helped consumers to identify quality products, which had a lesser risk of being counterfeited. Mars would certainly be vulnerable to such regulations, with ownership of Dolmio and Uncle Ben's, as well as its chocolate and petcare products.

In 2012, the company responded to the government's consultation on plain packaging, saying: "Mars is concerned that the introduction of mandatory plain packaging in the tobacco industry would also set a key precedent for the application of similar legislation to the other industries, including the food and non-alcoholic beverage industries in which Mars operates."

Furthermore, brand owners may be entitled to compensation if their trademarks can no longer be used. Mars is not alone in voicing concerns about plain packaging.

In April, the Institute of Economic Affairs (IEA) released a report on plain packaging warning that the British government could be liable for up to £5bn in compensation claims, should the measure go ahead.

Five countries have already filed complaints with the World Trade Organisation (WTO) against Australia, the only country to have introduced plain packaging. The matter will now be settled in court, with the complainants arguing the law is a restriction on intellectual property rights.

Back in April, the Dominican Republic's director general of foreign trade Katrina Naut, said: "Its plain packaging measure is failing to have the desired health effects of reducing smoking prevalence and remains detrimental to our premium tobacco industry."

More recently, Exane BNP Paribas concluded that tobacco companies had a "robust case against plain packaging which would allow it to claim compensation."

"The strongest legal arguments, in our view, surround the deprivation of intellectual property," the research and equities firm added. Despite these concerns and the ongoing WTO investigation, South Africa is planning to force tobacco companies to use plain packaging by 2015.

[UPDATE] Mars said in a statement yesterday: “The 2012 response was not a comment on the specific policy, we were highlighting the need to ensure any legislation did not have unintended knock-on effects on brand equity and intellectual property within other categories.  We will not be responding to the current consultation.”