Canada Looks to Plain Packaging for Cigarettes

Big tobacco was dealt another blow this week after Canada kicked off a process to strip cigarette packs of their branding, following similar moves by Australia and the U.K.

Canadian Health Minister Jane Philpott announced Tuesday a public consultation on plain packaging requirements for tobacco products. Plain packaging requires a uniform standardized color and font on all packages an also regulates the size and shape of products.

Over five million Canadians use tobacco, costing almost $4.4 billion in annual direct health care costs according to data from the Government of Canada.

Plain packaging aims at diminishing the appeal of smoking to youngsters and other potential smokers. In Canada, 85% of adult daily smokers had smoked their first cigarette by the age of 18, according to the government.

"I don't believe tobacco companies should be allowed to build brand loyalty with children, for a product that could kill them," said Dr. Philpott. "Research shows that plain packaging of tobacco products is an effective way to deter people from starting to smoke and will bolster our efforts to reduce tobacco use in Canada."

The consultation will run until the end of August.

British American Tobacco PLC, Philip Morris International Inc. and Japan Tobacco Inc. are the three largest cigarette companies in Canada, according to data from Euromonitor.

Canada's move comes after the U.K. begun implementing plain packaging for cigarette packs last month after a legal challenge against the measure by tobacco companies failed. Separately, the European Court of Justice recently upheld the 2014 Tobacco Products Directive, which paves the way for countries to put in place plain-packaging laws.

Australia became the first country to fully implement plain packaging, starting in 2012.

France recently passed legislation requiring plain packaging, with the law coming into effect last month. Ireland and Hungary have also passed plain-packaging laws. A total of 20 countries are looking at plain-packaging regulation, according to Wells Fargo analyst Bonnie Herzog. The U.S.'s free-speech laws make plain-packaging legislation all but impossible there.

Earlier this week on World No Tobacco Day, World Health Organization Director-General Margaret Chan endorsed plain packaging saying, "it kills the glamour."

The tobacco industry has pushed back hard, filing lawsuits in which it claims plain packaging is ineffective.

Imperial Tobacco Canada, Canada's largest tobacco company and a unit of British American Tobacco PLC, has lashed out at the Canadian government, accusing it of hypocrisy by regulating tobacco while taking steps to move ahead with legalizing marijuana.

"Announcing more tobacco regulations is an easy political win that will generate headlines, but do nothing to further reduce smoking rates," said Imperial Tobacco Canada's Director of Corporate and Regulatory Affairs Eric Gagnon.

"Plain packaging is a gimmick policy that does not work, "said Igor Dzaja, general manager of Japan Tobacco's JTI-Macdonald Corp. unit.

By contrast, WHO and other health bodies have pointed to data from the Australian government showing that smoking prevalence in those aged 14 and up has fallen by 0.55 percentage points because of packaging changes in the country.

Write to Saabira Chaudhuri at [e-mail]

(END) Dow Jones Newswires

June 01, 2016 06:05 ET (10:05 GMT)

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