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Australia Upholds Logo Ban On Cigarette Packs

(c) Sky News 2012

Australia's highest court has upheld a government plan to force tobacco companies to sell their products in plain packets with no logos or branding.

From December 1, all cigarette packets sold in Australia will be a drab olive colour, with uniform lettering and large graphic photographs showing the effects of smoking - such as diseased lungs and mouth cancer.

Major global tobacco companies had been fighting the new law, which is a world first.

Australia's attorney-general, Nicola Roxon, said the court decision was "a victory for all those families who have lost someone to a tobacco-related illness".

"This is a watershed moment for tobacco control around the world," she said in a statement.

"Australia's actions are being closely watched by governments around the world. Other countries might now consider their next steps.

"Today should be a clarion call to every country grappling with the costs and harm of tobacco and hopefully encourage them to take the next tobacco control steps appropriate for them."

The tobacco companies had argued the new law robs them of their right to branding, and is unconstitutional. They also said the government would unfairly benefit by being able to promote their own message on packaging while not compensating the tobacco manufacturers.

British American Tobacco (BAT) spokesman Scott McIntyre said the company was disappointed by the court's decision but would comply with the law.

"Although the (law) passed the constitutional test, it's still a bad law that will only benefit organised crime groups which sell illegal tobacco on our streets," Mr McIntyre said.

He added: "The illegal cigarette black market will grow further when all packs look the same and are easier to copy."

Imperial Tobacco (LSE: IMT.L - news) echoed that argument, with spokeswoman Sonia Stewart adding: "Plain packaging will simply provide counterfeiters with a road map.

"The legislation will make the counterfeiters' job both cheaper and easier by mandating exactly how a pack must look."

The government has dismissed these claims saying anti-counterfeit measures will be included on the new-style packs.

Australia already has some of the world's toughest legislation surrounding the retail of tobacco

All cigarette packets are hidden behind shutters in shops and many states and local councils have strict anti-smoking laws banning lighting up in areas such as outdoor cafes and on beaches.

BAT, Philip Morris International, Imperial Tobacco and Japan Tobacco International are worried that the law will set a global precedent that could slash billions of pounds from the values of their brands.

Australia estimates there are 15,000 deaths nationally each year from tobacco-related illnesses and that smoking costs more than Aus$30bn (£20bn) a year in healthcare and lost productivity.

Britain, along with other countries such as Canada and New Zealand, is considering introducing similar legislation.