Australian cigarette plain pack ruling – what does it mean for New Zealand

Australia’s High Court has given the country’s plain pack cigarette legislation a constitutional pass mark. The Tobacco Plain Packaging Act 2011 will come into force on 1 December 2012 as planned. From that date, all cigarette packs sold in Australia must be sold in olive green packs, adorned with health warnings rather than the brands of their manufacturers.

The Act survived a constitutional law challenge mounted by the tobacco companies that it breached section 51(xxxi) of the Constitution which allows parliament to make laws on “the acquisition of property on just terms”. The tobacco companies argued that the legislation extinguished their intellectual property rights in the trade marks they used to sell their products.

At this stage we do not know the reasons why the High Court reached its decision: its judgments are yet to be released. We do know that it was not unanimous but was by majority of the seven judges of the court.

The tobacco companies have apparently accepted the ruling: given no further appeals are possible, the Australian High Court being the country’s top-ranking court, that concession is of itself unsurprising.

They have not however given up. The tobacco companies’ fight will presumably switch to the international arena where complaints have been lodged with the World Trade Organisation from Ukraine, Honduras and the Dominican Republic, claiming the laws unduly restrict their trade with Australia.

Other countries, such as New Zealand and the United Kingdom, are also moving to introduce legislation along similar lines. The New Zealand government is currently consulting on such legislation, with a consultation paper being released last month.

New Zealand does not have the same constitutional provision as Australia so an identical constitutional challenge could not be brought if similar plain packaging legislation were to be introduced here. Differently mounted challenges may however be possible.

The tobacco companies have previously said they will challenge any New Zealand legislation. The Australian High Court decision, while not directly applicable in New Zealand, will therefore still make interesting reading. Any legislation which is enacted is also likely to be met with a complaint to the World Trade Organisation.