Proposed regulation of tobacco packaging in New Zealand could increase counterfeiting, ICC BASCAP warns

          • Paris, 04 October 2012

          Business Action to Stop Counterfeiting and Piracy (BASCAP), an initiative of the International Chamber of Commerce (ICC), cautioned that New Zealand’s proposal to require plain packaging of tobacco products could result in a series of unintended consequences on the ability to control the flow of illicit trade and ultimately on future economic growth.

          Proposed regulation of tobacco packaging in New Zealand could increase counterfeiting, ICC BASCAP warns

          “Counterfeiting and piracy continue to be a major problem both in New Zealand and the rest of the world, and plain packaging of any product will make it easier for fakes to enter the marketplace,” said BASCAP Director Jeffrey Hardy. “Organized crime syndicates that make enormous profits on fake cigarettes would like nothing more than laws that require plain packaging and eliminate distinctive and distinguishable branding. Plain packaging of products will open the door to counterfeiting in New Zealand and make it more difficult and costly for New Zealand’s law enforcement officers to fight against these criminals.”

          BASCAP provided its views in response to the New Zealand Ministry of Health’s public consultation on a proposal to introduce laws requiring plain packaging of tobacco products. BASCAP’s views concentrated on the extenuating negative impacts of plain packaging on intellectual property (IP) rights, counterfeiting and the risks to other industries from such a precedent-setting intervention by the government into IP rights.

          BASCAP is concerned that plain packaging effectively eliminates the use of trademarks, making it easier for counterfeiters to distribute fake products and more difficult for brand owners and law enforcement officers to take action against such activity. Plain packaging undermines companies’ ability to develop products and services that will bring financial rewards for their work without risk of theft, and at the same time robs consumers of the protection of trademarks. BASCAP cautioned that taking this step against one industry creates a dangerous precedent for other sectors.

          “The ability of brand owners to market their product in unique and easily identifiable ways is fundamental to the protection of IP rights in developed societies,” Mr Hardy said. “Trademarks are legal property rights and serve these important functions in the market for all branded goods. Removing one industry’s ability to use its IP rights is government expropriation of private property and opens the door to extend this violation to other industries and other brand owners.”

          The BASCAP submission also held that plain packaging would have a negative impact on competitiveness, as well as exacerbate an increase in illicit trade – draining the New Zealand economy of growth, jobs and tax revenues.

          “At a time when industries across New Zealand are struggling to improve competitiveness and create jobs, the last thing they need is for the government to tamper with the fundamental IP right of product differentiation through trademarks and packaging. Over the long term, such interference could result in damage to New Zealand competitiveness and jobs,” Mr Hardy said.

          BASCAP noted that the new law would undermine the ability of consumers to make informed purchasing decisions.

          “While BASCAP supports the Ministry’s objectives to improve health, New Zealand and governments around the world must guard against intrusive lifestyle regulation, especially when new laws are not based on any evidence that the regulation will impact consumer behaviour.” Mr Hardy said.

          Plain packaging suppresses the freedom of communication between manufacturers and consumers. It also limits the ability of consumers to exercise choice and removes an important tool for consumer recourse and accountability for poor product performance, quality and other concerns.

          BASCAP called on public authorities to avoid implementing policies that would weaken the objective and purpose of current initiatives undertaken to fight against counterfeit and illicit products, or that would otherwise directly or indirectly undermine the protection or enforcement of IP rights. New Zealand’s Intellectual Property Office has been a leading voice in support of IP and rules-based commerce.

          For more information visit the Plain packaging page

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