Tobacco giant issues legal threat over plain packaging

One of the world’s largest tobacco firms has told the Government to immediately halt plain packaging legislation in the Dáil or face a High Court claim for damages.

JTI Ireland, owner of the Benson & Hedges and Silk Cut brands, has told Ministers James Reilly and Leo Varadkar that it will take legal action if they fail to promise by Friday that no further steps will be taken to enact the draft law.

The intervention by the company, whose Geneva- based parent the Japan Tobacco Group has a market capitalisation in excess of €55 billion, comes as the Dáil health subcommittee prepares for a debate today on measures to ban branded designs on tobacco packaging.

The firm’s legal threat to the two Ministers, which was copied to Taoiseach Enda Kenny, was issued a week ago via solicitors Arthur Cox.

Dr Reilly introduced the Public Health (Standardised Packaging of Tobacco) Bill last year when he was minister for health. He retained command of the file when he became Minister for Children and Dr Varadkar took over the health portfolio.

Basic aim

The basic aim of the legislation is to remove the last space for tobacco advertising, reducing the incidence of smoking and diminishing the industry’s power to recruit new smokers.

In a statement last night to The Irish Times, Dr Reilly said there was no justification for delaying the legislation further. "As Minister for Children and Youth Affairs, my responsibility is to progress measures that will protect children and stop them from taking up smoking in the first place," he said. "It is not to protect the profits of tobacco companies."

The latest manoeuvre by JTI, whose brands also include Camel, Winston and Hamlet cigars, follows heavy lobbying of the Government by powerful American and Irish business interests, who have argued that the draft law tramples over their intellectual and other property rights.

In sweeping assertions to a sovereign government, JTI claims the State has no right to enact the draft law and – in effect – instructs the Ministers to halt its parliamentary passage while a British case in Europe’s highest court continues.

Court case

“For these reasons, please undertake to us as soon as possible and, in any event, on or before 20 February 2015 that no steps will be taken to enact the Bill pending the outcome of the reference to the Courts of Justice of the EU by the High Court of England and Wales,” the letter says.

“If this undertaking is not forthcoming, JTI proposes to issue proceedings challenging the competence of Ireland to enact this legislation and, in the absence of an appropriate undertaking in relation to the legislation pending the outcome of these proceedings, will seek such relief as is appropriate from the High Court.”

Ireland would be the first EU member state to ban branded tobacco packaging, prompting anxiety in the global tobacco industry that an Irish law could set a precedent to be followed by other European countries.

JTI, owner of the former Gallaher tobacco business, says in the letter it directly employs about 100 people in the State, supplies 3,100 retailers and paid more than €665 million in Irish tax in 2013.

The firm claims the State has no right to introduce binding packaging restrictions that are stricter than those necessary to transpose the new EU directive on tobacco into national law.

Separately, Ibec chief executive Danny McCoy wrote to the Taoiseach, Tánaiste and a number of Ministers late last week expressing the employers’ organisation’s concern about the legislation and asked that its passage be paused.