LEX VINI

First Cigarettes, Now Alcohol: Toward “Plain Packaging” For All

Strict packaging regulations in countries outside of the U.S. (particularly Asian countries such as Thailand) for products considered to pose public health risks is nothing new.  We have seen health warnings covering virtually the entire package, and graphic depictions of diseased lungs, kidneys  and other organs adorning alcohol and cigarette packaging in the past. Now there is a movement afoot to institute “plain packaging” requirements for cigarettes – and now alcohol – which may soon bleed into other industries and product categories.

“Plain packaging” typically entails the complete removal of all branding (trademarks, logos, images and color) in order to decrease the desirability of a product to consumers.  Cigarette manufacturers subject to plain packaging requirements use standardized, plain color packs and are allowed to print only the brand name in a mandatory size, font and place on the pack, in addition to any required health warnings and information such as toxic constituents.

The plain packaging movement began in 2012, with Australia’s institution of the Tobacco Plain Packaging Act of 2011 (here) in connection with the sale of cigarettes, which required all manufacturers to use uniform green packages with white labels.  Several countries, including the Ukraine and Indonesia, have since brought a formal challenge to the plain packaging regime at the World Trade Organization (WTO) (Dispute DS434, summary here).

In a further response to the plain packaging requirements being imposed on Indonesia’s tobacco exports to Australia, the Indonesian government last week began drafting “retaliatory” regulations against alcohol products, that would require the use of plain packaging or graphic warnings to negatively influence consumer alcohol purchasing decisions, which is intended to apply to any products containing 20% or more alcohol by volume.  This is the first set of proposed plain packaging requirements directed at the alcohol beverage industry.

In response to this development, there are major concerns coming from the alcohol beverage industry, that the institution of plain packaging requirements will create a hostile environment giving rise to counterfeiting and consumer fraud, both in domestic and import/export markets, particularly in the premium liquor space.

This news comes on the heels of a similar movement in Ireland to institute plain packaging requirements for tobacco, as reflected in the publication and presentation to Irish Parliament of the Public Health (Standardised Packaging of Tobacco) Bill 2014 (available here). Intellectual property groups, particularly trademark owner associations such as INTA, MARQUES, ECTA and others voiced concerns last month (here) that the plain packaging requirement will be extended to other product categories.

In what amounts to a potential “nuclear” proliferation of plain packaging legislation, the apparently retaliatory posture of the Indonesian government which has given rise to the proposed alcohol plain packaging push has its roots in Indonesian opposition to Australian plain packaging requirements for tobacco products. (This irony has not been lost on the international press.)  The end results of this “tit-for-tat” exchange promise to be interesting indeed, and could potentially set the stage for widespread global effects on the marketing and sale of alcohol products.

For intellectual property protection and enforcement inquiries, please contact Chris Passarelli, Senior Intellectual Property Counsel at Dickenson, Peatman & Fogarty, at: cpassarelli@dpf-law.com.

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