The final chapter of what started with the Tobacco Plain Packaging Act of 2011 in Australia remains to be seen, with a complaint presented by Ukraine, Honduras, Dominican Republic, Cuba and Indonesia before an arbitration panel at the WTO still pending. However, the splash made by this new Australian regulation did generate massive waves of both private concern and public initiative that have spread around the globe.
Across the Pacific Ocean the ripple effect reached Chile at high speed, with a new Bill (Boletín 8886-11) introduced to the Senate in 2013 and currently at the second stage of the legislative process being reviewed by the Chamber of Deputies. The original motion, following the example of the Australian Act, proposed to change current Chilean regulations in order to include mandatory warning language and pictures on 100% of the two main outer surfaces of the cigarette packaging. After further discussion in Congress, the Bill that passed on to the second stage of the legislative process also dictates that the packaging of all cigarettes sold in Chile must be generic with merely 30% of the whole package surface space dedicated to the trademark. Thus, the trademark will be located and presented in the same way on all packages, and all packages will have the same color, opening mechanism, composition and dimensions. In addition, all cigarettes must be white with a cork-colored filter. Moreover, adding flavoring and additional language to tobacco products, such as the words "light," "low" or "soft" that indirectly produces the impression that the product is less harmful than other tobacco products, is also forbidden.
Once the Bill was approved by the Senate in early July of this year, passing on to the second stage of the legislative process, while cheers of joy could be heard at the Ministry of Health, British American Tobacco Chile, holding 93% of the market share in the country, announced the closing of its production operations in Chile and an immediate reduction of its personnel by 20%. While discussions are still at an early stage in Chile, critical decisions loom in the future in which the Constitutional Tribunal and the Supreme Court will play a crucial role. On the one hand, the Ministry of Health, Congress and the Bill's advocates in general argue that this regulation will cut millions of dollars that the public sector currently spends on treating diseases related to tobacco consumption, while also dramatically increasing the general health of the Chilean population. However, on the other hand, the private sector, mainly the tobacco companies, faces a seemingly unconstitutional restriction to its crucial and elemental right to Property as these measures could potentially expropriate long tenured trademarks and facilitate the existence of counterfeit products. Moreover, it is probable that this Bill will have its own ripple effect causing new regulation to be introduced meddling in other areas of the private sector such as food and alcohol, as well as producing a proportionate loss in tax revenue due to the reduced sales and manufacturing of tobacco products.
The consumer who these measures are trying to protect by deterring him or her from consuming tobacco products is the same one who has willingly chosen to take advantage of the legal right to purchase these products but may now be confused and misled into buying counterfeit or wrong products. Is it right to limit the property and liberties of some under the excuse of protecting the health of those who willingly buy tobacco products?
With pending decisions by panels of the WTO and with ongoing multilateral discussions at the WTO (the interpretation of art. 20 of TRIPS) as well as bilateral conversations between states (Australia-Ukraine), Chile will likely delay taking any major decision for now. However, one thing is certain: More than 11,000 kilometers across the ocean, there an open debate in Chile, and despite the fact that the results of this debate are still a complete unknown, the waters have already been stirred.
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