Source: http://www.nytimes.com/
Author: Bloomberg News

Philip Morris International said it had started legal action against the Australian government over the nation’s plans to allow the sale of cigarettes only in plain packages.

The company filed a notice of claim against the government saying that the proposals violate terms of Australia’s Bilateral Investment Treaty with Hong Kong, according to an e-mailed statement on Monday from Philip Morris’s Asian unit. A copy of the court document was not immediately available.

Australia, which has already banned the public display of tobacco products in retail outlets, wants to outlaw logos on cigarette packs and force them to be sold in plain dark-olive packaging, carrying health warnings instead of company logos. Cigarette brand names will appear on the packages in the same size and style of printing. The legislation, if passed by Parliament, would come into force in 2012.

“The forced removal of trade marks and other valuable intellectual property is a clear violation of the terms of the bilateral investment treaty between Australia and Hong Kong,” Anne Edwards, a spokeswoman for Philip Morris Asia, said in the statement. “We believe we have a very strong legal case and will be seeking significant financial compensation for the damage to our business.”

The government raised tobacco taxes by 25 percent last year as it sought to curb smoking, which is the nation’s largest single preventable cause of death, according to the nation’s health minister, Nicola Roxon.

“We don’t believe that taking that action is in breach of any of our international obligations,” Ms. Roxon told Sky News. “We believe that we are able, and the Australian people I think would expect their government, to take action in the interests of public health.”